Preamble

The House met at Ten o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

AREAS OF SPECIAL SCIENTIFIC INTEREST

10.4 a.m.

Mr. Marcus Kimball: I beg to move,
That leave be given to bring in a Bill to make provision for the better protection of areas of special scientific interest; and for purposes connected therewith.
In asking leave to introduce this Bill I am asking for a Bill which makes special provision for the better protection of areas of special scientific interest in the countryside. The House will realise that these are areas which the Nature Conservancy has designated with its powers under Section 23 of the National Parks and Access to the Countryside Act, 1949.
In that process the Nature Conservancy has a duty to notify the local planning authority that these particular areas, which are known for easy reference as S.S.S.I.'s, are areas of special scientific interest from the botanical point of view or of special interest to naturalists. We have about 2,080 such sites in the British Isles. My Bill, which I seek leave to introduce, has the wholehearted support of the County Naturalists Trust, and I think that those Members of the House who take an interest in these matters will be aware that the Lincolnshire Branch of the County Naturalists Trust is one of the most active and successful.
The spirit behind the Bill is in no way restrictionist. It is to give better powers of protection, so that a greater use can be made of S.S.S.I.s once a site has been designated. If it is to be used for educational purposes, then one must have the proper powers to protect it if one shows more people what is the merit of the site and what is so rare and important. The example in the county of Lincolnshire is where the S.S.S.I.s are used as outside laboratories for the education of

school children. This is something which should be followed throughout the country. If we get this Bill, and I trust that we shall, then we will be able to build upon the powers given to protect valuable assets of the countryside, and to create a far better understanding of it among town people, who have no knowledge.
In asking leave to introduce this Bill I am conscious of doing so at a late stage. On the other hand, we have a rather unique situation. We all know that the Government have bags of time on their hands. I hope that all outside bodies which have useful Measures like this that they want to get on the Statute Book will approach the Government at once to see that our morning sittings are used for such valuable Measures as these.
Even if there is not time for my Bill to go through all of its stages, I would suggest that a very important precedent has already been created by which a full Second Reading debate on one whole morning is given to a Bill which gets the right to a Second Reading without opposition. I hope that at least we will have a full day's debate on the Second Reading of this Bill, as has already been done on a previous occasion.
There are three very important reasons why it is vital that this should be done during the month of June. First of all, we have seen a complete failure by the Government to deal with the problem of sites of special scientific interest in the Countryside (Scotland) Bill, now going through the House. We know that the odds are good that the Government will come forward in November with a Bill to deal with the problem of the English countryside. I would argue that there is a very good case for the inclusion, after we have debated them in this House, of many of the provisions of my Bill into the Countryside Bill for England, because the provisions which have been found inadequate to protect S.S.S.I.s were included in the National Parks and Access to the Countryside Bill, 1949.
Thirdly, the Bill is urgent because of the recommendation of the Legislative Committee of the Duke of Edinburgh's Study Conference on the Countryside in 1970 that more priority should be gvien to the protection of sites of special scientific interest. I asked leave to introduce a similar Bill about 18 months ago.


At about that time most naturalists were prepared to give this Government the benefit of the doubt. They felt that the Government had some interest in the scientific preservation of the countryside. However, once the Tees Valley Water Bill was launched on its course, all illusions about the Government's sympathy in this matter were shattered and we now see what is the underlying trend of Government inaction towards these issues.
In asking leave to introduce the Bill I should declare an interest. I am the owner of an S.S.S.I. It is a botanical one, amounting to an area of about two acres. When the area first came to be scheduled by the Nature Conservancy it sent me a copy and said that it would advise the local planning authority that it would be forced to schedule an area of about 150 acres. We finally settled for a scheduled area of 30 acres.
The House should realise the reasons for this devious procedure. If an area of simply one acre is scheduled, everybody knows where the site of special scientific interest is. There is a very good case for security in these matters. It is the visiting public or the visiting naturalist who wants to take a particular plant or sedge against whom protection is needed. People may be keen to take things home and establish them elsewhere without full knowledge of the problem or realising that such things are not likely to grow elsewhere. Under the existing provision, one is also forced to designate much larger areas to protect them for agricultural operations such as spraying and the making of muirburn.
We have also the extraordinary situation, which the Bill would rectify, whereby one Government Department gives a grant for something which another Government Department wishes to preserve. This is one of the shortcomings of the present procedure. As the House knows, we have got rid of the ploughing grants, the merits of which it would not be appropriate to discuss at this stage, but we are still faced with the land reclamation grants. The Minister of Agriculture has no power to refuse a reclamation grant for an area which may be a site of special scientific interest if it would be good agricultural practice to plough up and destroy the area. My Bill would make provision for

a standstill until a proper arrangement could be made.
On the other hand, one has to realise that if we take away from an owner of land the right to cultivate it—if we tell a person that he can only graze an area and cannot plough it up, and that he cannot chop down scrub trees to carry out the proper practices of forestry—some form of compensation must be paid to the owners of sites of special scientific interest. I do not think that the House has ever considered whether somebody who operates his woodlands under a dedication scheme is entitled to retain an area in unproductive timber production simply because it is a site of special scientific interest.
We are fortunate that the Forestry Commission takes such a sensible and tolerant attitude on this matter. That is reflected in the Commission's appointment only the other day of a special conservator for all wild life in the private and State woodlands of the United Kingdom.
The final problem with which the Bill would deal is that many owners do not even know that they have a site of special scientific interest until a naturalist comes along and tells them, "You cannot do that to this area". There is no existing procedure for notifying owners. All that the Nature Conservancy has to do is to notify the county planning officer.
I trust that in these brief ten minutes I have made the case why such a Bill is urgently necessary. I look forward to the Leader of the House granting me the opportunity of a full morning sitting during the month so that I may develop all the arguments on the Bill and have the opportunity to explain to the House the reason and need behind all its seven Clauses.

Question put and agreed to.

Bill ordered to be brought in by Mr. Kimball, Mr. Costain, Mr. Ramsden, Sir J. Gilmour, Mr. Longden, Mr. Eldon Griffiths, Sir G. Sinclair and Sir J. Eden.

AREAS OF SPECIAL SCIENTIFIC INTEREST

Bill to make provision for the better protection of areas of special scientific interest; and for purposes connected


therewith, presented accordingly and read the First time; to be read a Second time upon Friday, 16th June, and to be printed. [Bill 164.]

GREENWICH HOSPITAL AND TRAVERS' FOUNDATION

10.14 a.m.

The Under Secretary of State for Defence for the Royal Navy (Mr. Maurice Foley): I beg to move,
That the Statement of the Estimated Income and Expenditure of Greenwich Hospital and Travers' Foundation, for the year ending on 31st March, 1968, which was laid before this House on 11th May, be approved.
This is the first occasion that I have had the privilege of moving a Motion of this kind. In doing so, I wish to pay tribute to my hon. Friend the Minister of State, Board of Trade and to my noble Friend the Parliamentary Secretary to the Ministry of Public Building and Works, who have guided the fortunes and have so diligently looked after the affairs of Greenwich Hospital School and the associated activities covered by the Foundation.
As the House will know, the hospital meets expenses and provides its benefits from its own income. The estimates show how the income will be obtained and how it will be spent. They do not show the capital transactions but these are included in the annual accounts of income and expenditure which are presented to Parliament with the report of the Comptroller and Auditor General.
It will be seen from page 2 of the estimates that the income has topped the £½ million mark. This was forecast by my hon. Friend the then Minister of Defence for the Royal Navy in the debate on the estimates last year. It will be noted, too, that the income from other property has doubled while interest and dividends have gone down considerably. I assure hon. Members that this is not due to a Rachmanlike attitude over rents nor to a bad choice of City investments. It reflects a policy decision, which was reached on the advice last year of the Greenwich Hospital Panel on Investments, that we should increase our holding of commercial properties. As will be seen, this has been done most successfully, since the net increase in income by switching in this manner has been £24,000. I should like to pay

tribute, as my predecessors have done, to the work of this advisory panel, whose members give their services free to Greenwich Hospital.
It is well that the income has increased, because the costs of running and developing the school are high. Moreover, it has been found possible to give higher pensions to the widows of ratings, so that there are currently 645 of these pensions in issue at an annual cost of £31,500. This compares favourably with 333 pensions at about one-third of the cost in the year 1959–60.
It has also been possible to keep the fees at £120 per annum and to ensure that no one pays more within this figure of £120 than he or she can afford without hardship, although the estimated cost per boy for 1967–68, as indicated on page 6 of the estimates, is £464.
I turn briefly to the school. That the school is in good heart can be realised from the fact that in the General Certificate of Education examinations held in 1966, 130 boys gained between them 38 subject passes at advanced level and 424 at ordinary level. The Certificate of Secondary Education was taken by another 42 boys, who between them gained 272 subject grades 1 to 4, including 27 in grade 1. On these results of the senior boys, five gained places at university and another three gained admission to teacher-training colleges or to colleges of technology for degree courses, while another four gained naval cadetships. Of former pupils, three gained entry to university and another a naval commission in the medical branch.
Of the 66 boys leaving the school to commence their careers in 1966, 13 entered the Royal Navy and five the Merchant Navy. Thus 27 per cent. adopted a seafaring life. Five of the remainder entered service in Her Majesty's Dockyards and another five joined the Army, the Royal Air Force or the police.
I am grateful to my hon. Friend the Member for Stirling and Falkirk Burghs (Mr. Malcolm MacPherson) and to the hon. Member for Merton and Morden (Mr. Humphrey Atkins), who represent the House on the Committee, for their interest and help in all matters pertaining to the Foundation and the school. I shall listen with great interest to the debate and endeavour later to deal with the points which are raised.

10.20 a.m.

Mr. Humphrey Atkins: I welcome the hon. Gentleman the Under-Secretary of State for Defence to these debates, of which he is now in charge, and join in his tribute to his predecessors, particularly to the hon. Member for Huddersfield, East (Mr. J. P. W. Mallalieu) who took such an interest in the affairs of Greenwich Hospital not only when he was Under-Secretary but for many years before, when he served on the committee of the school. We are glad that the hon. Gentleman is now in charge of the school's affairs and we hope that he will be for as long as his Government remain in office, which, of course, we hope will not be very long.
I must comment on the ineptitude of the managers of Government business in having this debate today. I do not object to its being held on a morning, but of all mornings that of 5th June was the worst possible one to choose. The reason, as the Government know perfectly well, is that the Management Committee of the Royal Hospital School, of which the hon. Gentleman is chairman and of which I and the hon. Member for Stirling and Falkirk Burghs (Mr. Malcolm MacPherson) have the honour to be members, meets three times a year and only one meeting, that in the summer term, can be held at the school.
Because many distinguished and busy people are on the Committee, these arrangements have to be made some time ahead and it was decided months ago that the summer term meeting should be held at the school this morning—

Commander Harry Pursey: I should like to be clear as to whether the hon. Gentleman's criticism, which I support, is of the decision to have either the debate or the other meeting today or of holding this debate on a Monday morning.

Mr. Atkins: My criticism is that, of all Monday morning sittings of the year, this is the most inconvenient, because the Management Committee meeting had been fixed for today. Because so many other members of the Committee are extremely busy, it is not possible easily to arrange the meeting at the school for another day. The managers of Government business knew this but said that the debate would nevertheless be held. Of course Parliament's claims should be

paramount, but the Government ought to be able to organise their affairs better than this—although we are getting accustomed to the fact that they cannot, so perhaps we should not be surprised.
In the corresponding debate last year, I suggested that, because of the pressure on Parliamentary time, we should consider holding these debates either less frequently or somewhere else. Since then, of course, morning sittings have been introduced, which have theoretically eased pressure on time, but I should like to know what thought has been given to my suggestion and whether it is proposed to pursue it or whether the hon. Gentleman and his colleagues consider that morning sittings have solved the problem.
The hon. Gentleman mentioned the remarkable increase in income of Greenwich Hospital and I see that the estimate is for an increase of nearly 10 per cent. which, in these difficult days, reflects great credit on those who advise the hospital on its investments. The greatest increase has come from the switch of investments from British Government securities, debenture and ordinary stocks into property. I was glad that the hon. Gentleman said that this was not the result of a "Rachmanlike" approach by the hospital, and I take it, therefore, that the increase is almost entirely the purchase of new property rather than the revising of rents on existing property. Perhaps the hon. Gentleman would confirm that.
The income from fees at the school shows an increase from £74,000 to £79,000, yet there is no increase in the rate of fees. These were established at £120 on 1st January last year and there has been no change since. How, therefore, is there an increase in the estimate for the ensuing year?
The most notable feature of the expenditure is the alteration in the figures for pensions to officers, seamen, marines and widows. There is a notable drop, of about 25 per cent., in the pensions payable to officers. Why is that? Is it because fewer officers are applying for pensions, rather than a deliberate act of policy to restrict the sums payable to make them more readily available to seamen, marines and widows?
The figure for headquarters administration is virtually static and reflects considerable credit on all those concerned.


The cost is about 6 per cent., which compares favourably with the cost of administration of many other charitable organisations. I congratulate those concerned.
The school represents, of course, the bulk of the hospital's work. As to its size, we see on page 6 that the number of boys enrolled has been steadily increasing over the last six years and that the figure for 1965–66 was 679 boys. At the beginning of the spring term this year, there were 697 boys on the roll. Is it intended steadily to increase the number of boys or is there a particular target? If the latter, what is it?
The hon. Gentleman gave figures about educational successes achieved at the school, for which I am sure that we would all like to congratulate the headmaster and his staff. However, is it not true that the school has been developing as a good school should over the years in accordance with modern trends and that, in particular, there has been considerable recent expansion of the sixth form, with many more boys staying on longer for higher qualifications? We should be grateful for some idea not only of how the sixth has expanded in recent years but of the plans for it to do so over the next few years, which would show the House and the country how the school is developing in accordance with modern trends.
I have said in these debates before that this is a very fine school and I have no hesitation in saying so again. I have been reinforced in my view as a result of having the privilege of serving on the Management Committee for over a year. I have, in this position, been able to see at close quarters much more of what is being done. This has reinforced my belief that the Royal Hospital School at Holbrook provides an absolutely first-class education for a large number of boys.
The headmaster, his staff and all concerned deserve a great deal of praise for the way in which they run the school. They are fully conscious of the need to change with the changing times and to develop the school. Naturally, the business of the Management Committee, in so far as it can, is to help the school to do that. I like to believe that the hon. Member for Stirling and Falkirk

Burghs and I do a little to help the school to do that.
This is a first-class foundation which is providing a first-class education for a large number of boys and our business on the Management Committee is to do all we can to help the school develop in the right way. It will be the wish of the House that we should do this and the House as a whole will wish the school to make still further improvements.

10.31 a.m.

Commander Harry Pursey: These annual Greenwich Hospital estimates are in respect of an ancient and wealthy nautical charity, the Greenwich Hospital, which, as the White Paper shows, has capital assets of over £4 million and an annual income which has gone up to about £½million. The two main purposes of this charity are pensions by selection for a limited number of retired officers, ratings and widows and, as the Navy's orphanage, the Royal Hospital School at Holbrook, Suffolk, is designed to provide an education for the sons of seafarers—the Mercantile Marine as well as the Royal Navy—with a preference for orphans from the age of 11.
I intend to confine my remarks to the Royal Hospital School, where, as an orphan, I was educated 60 years ago; and afterwards I served in the Navy for 30 years. My first duty, however, as the senior hon. Member present today—and the only one who has taken part in debates on this subject for the last 22 years—is to welcome my hon. Friend the new Under-Secretary of State for Defence for the Royal Navy as a novice to the Greenwich Hospital lobby and also as the Chairman of the Board of Governors of this school.
My second duty, as the senior hon. Member here, is to welcome the introduction of morning sittings, particularly Monday morning sittings, because the subject we are debating is typical of what can be discussed on a Monday morning. This enables us to debate estimates of this kind at the proper time of the day, in the forenoon, instead of late at night or early in the morning—or even at 4 o'clock in the morning, as happened one year.
Last year the hon. Member for Merton and Morden (Mr. Humphrey Atkins), in


his first speech from the Opposition Front Bench—if not the first speech he ever made on this subject—argued that we ought not
… to consume hours in this Chamber debating the affairs of Greenwich Hospital."— [OFFICIAL REPORT, 2nd November, 1966; Vol. 735, c. 527.]
He made the same argument this morning and pointed out, in particular, that we should debate these estimates less frequently. What is frequent about debating them once a year? What is the alternative? Would the hon. Gentleman prefer us to discuss them once every five or 10 years, or once in a lifetime? Fortunately, the reform of our procedure provides a better opportunity than hitherto during the last two centuries.
The hon. Member for Merton and Morden further argued that we have these debates because of the Greenwich Hospital Act, 1883. That argument is nonsense. He did not appreciate then, and he probably does not appreciate now, that debates about Greenwich Hospital have taken place from 1714 in this House. They probably took place earlier than that, but our records are not as good pre-1714 as after that date. Most of those debates dealt with the accounts.
In the early part of 1727 Greenwich Hospital was debated on no less than four occasions, but I will not go into that today. The subject was included in the King's Speech of that year, and later the estimates and accounts were debated. The reason, of which the hon. Member for Merton and Morden is probably not aware, is that the first naval pensions were Greenwich Hospital pensions, a long time before they became State pensions. Although there was a certain amount of charitable and prize money involved in these pensions, Government funds were also provided. Consequently, it was Government money that was then being discussed—and it is Government money still that is being discussed, because some of the money in these estimates comes from the Treasury.
We see that there is every reason why the estimates of this wealthy nautical charity should continue to be debated annually, as they have been for so many years. After today's debate, which may last for only an hour or so, the hon. Member for Merton and Morden will have

no reason to argue against these estimates being debated on the Floor of the House once a year, in the way they have been debated for so long.
It is obvious that those of us who have been closely associated with this school over the years and who have been worried about the deterioration in its use—the misappropriation of the school, to which I shall come later, and the wrong people being entered and the right people being kept out—should wish to continue to bring this matter before Parliament at regular intervals. It is obvious, too, that there is only one object in the mind of the hon. Member for Merton and Morden, and that is secrecy. He wants to stop these debates in the presence of the public and the Press. Have not we every right to attack the wrong-doings of the school?
The hon. Gentleman suggested that this matter should be debated in Committee, where less attention would be given to it, or, alternatively, that it should not be discussed at all. Thus the object of his argument must be that the wrong policies and developments should continue in future, as they have occurred in the last three decades, as I shall show. In other words, the whole suggestion is a phoney one for the sake of secrecy. The object is to prevent people from knowing what is going on.
In previous years far more information has been made available, not only about the school but about other matters. We used to have printed in the Estimates the number of staff and salaries paid. The Navy List used to contain the names of the officers who were receiving Greenwich Hospital pensions. Evedybody was able to know what was going on, but that information is now being withheld.
In recent years the conduct of this orphanage has been a matter of acute controversy, notably between the former Under-Secretary of State, my hon. Friend the Member for Huddersfield, East (Mr. J. P. W. Mallalieu), and myself. When debating previous Estimates it has been virtually impossible, even with a diamond drill, to get him to understand the accurate position of this orphanage and the documents relating to the purposes for which it was founded. On many occasions, I have tried to point out the way in which this orphanage was run for centuries and how its use has changed in recent decades to the serious disadvantage of the sons of


seafarers and particularly to the disadvantage of orphans. It is to be hoped that we have better luck with the present Under-Secretary of State and that he will be on the side of the poor widows and orphans of ratings rather than on the side of the "brass hats" still serving on a high rate of pay whose sons are accepted into this orphanage at the expense of the sons of ratings.
The school was founded in 1712 at Greenwich, opposite the College, in the buildings now used by the National Maritime Museum. The buildings were given by William and Mary as a tribute to the casualties caused in the wars of those days. The object is clearly on record in the original Charter as the free
maintenance and education of the children of seamen
both mercantile marine and Royal Navy
slain or disabled in … service.
Obviously this meant that orphans should have first consideration.
This policy was carried out for over 200 years at Greenwich with a complement of 1,000 boys in the school. The hon. Member for Merton and Morden asked what the target was for Holbrook. He should appreciate that there are only half the number of boys there for which the plans of the school were originally drawn. The original number was 1,120. Therefore, the question he should be asking is: where are the other 500 boys' places; why is not the number 1,000, as it was at Greenwich; and why has not the number been increased to 1,120, which is the figure given in all the estimates and records for the 1930s?
In the early 1930s the Admiralty and Greenwich Hospital came in for a heavy windfall both in land and in money. A wealthy New Zealand sheep owner, saved by the Navy after the ship in which he was a passenger was torpedoed, gave the Admiralty a free gift of no fewer than 680 acres at Holbrook where the school now is and a large sum of money and further sums which accrued from his estate, as shown in the estimates, under the Reade Foundation.
The Admiralty decided to build a new orphanage on the site—but what an orphanage! The original plans were for a complement of 1,120 boys and they were priced at £1 million. As the money

was not then available, two of the hostels were cut out and have never been built, in spite of the fact that an appeal was made to the Services by the Poppy Day organisers, experts in appeals, to get the money to build the missing hostels as a memorial to Admiral Jellicoe and Admiral Beatty. But even the Navy would not contribute, knowing the way in which the money was being thrown away in hundreds of thousands of £s at Holbrook. Hence the reason why the present complement is only about half what it should be.
Further large sums of money later became available and the Admiralty had the option of building the missing hostels or a church. The obvious thing to do was to build the hostels in order to accommodate the full complement of boys, particularly as the church services are held only once a week and had been conducted in the gymnasium in which there was adequate accommodation. But, no, the Admiralty decided to build a church and not the two missing hostels. Therefore, we have the most expensive school in the country if not in the world with the largest, most fabulous church, with a large organ which can be played properly only by an organist from an Odeon cinema or Westminster Cathedral, and the largest swimming pool in the country. But all this has been done at the expense of about 500 missing places for the sons, preferably orphans, of seamen, for 30 years.
The school was moved from Greenwich to Holbrook in 1933—three decades ago in a 250-year history. For another 16 or more years the same regulations continued in force. There were seven classes of entry, the first four being the various categories of orphans: first, both parents dead; secondly, father killed on duty; thirdly, father dead, mother living; fourthly, mother dead, father living. The selection was restricted, as it had been throughout, to the sons of lower deck men, namely, the sons of warrant officers, non-commissioned officers, petty officers and men of the Royal Navy and Marines, men of the Royal Naval Reserve—that is, the Mercantile Marine and other seafaring people, which included fishermen and lifeboatmen.
The first breach in these regulations was made in 1949, or less than 20 years ago, when the Admiralty decided to enter


commissioned officers' sons at the expense of ratings' sons—because obviously every officer's son must take a place which should be given to a rating's son, preferably an orphan. The result has been that in the last 18 years over 500 commissioned officers' sons have been entered and over 500 ratings' sons and orphans kept out. What a scandal!
What is the present position at the school? The figures vary from term to term, but the following figures give a fair picture. The total number is about 690, or less than two-thirds of the total number of boys who should be there. During one term, 79 fathers of the boys were direct entry cadet officers. None of those boys should ever have been entered. The number of boys of officers commissioned from the lower deck was 157. They should never have been entered. Every one of us who obtained a commission from the lower deck realised that when we left the lower deck we would lose certain privileges and gain certain officers' privileges. One of the privileges which we always understood we would give up was to send our sons to Greenwich Hospital School, because it was reserved for the sons of seamen. The number of ratings' sons was only 458, which means that one-third of the boys were officers' sons as against two-thirds who were ratings' sons. It will not be long before it is two-thirds officers' sons and one-third ratings' sons, and then three-thirds officers' sons and no ratings' sons.
The number of orphans was 84, not 1 in 8. They were made up of 13 direct entry officers' sons, seven sons of commissioned officers from the lower deck and 64 ratings' sons. The number of new entrants during that term was 24. On one occasion, there were 15 sons of ratings, 8 sons of lower deck entry officers and one son of a direct entry officer. Thus, 9 places out of 24 were lost to ratings' sons.
Some cases of ratings' sons being rejected are quite scandalous. For example, the son of a petty officer with a fine school record of work and play and excellent conduct was refused. Two ratings' sons from the same school in a naval port were rejected. The headmasters of all three boys considered they should have been accepted, and, in fact,

they were accepted elsewhere for a higher standard of education. Such ratings' sons stand no chance, however, and orphans even less chance, in competition with officers' sons specially prepared for entry.
Officers' sons can be educated at other schools and the full fees paid, so why should not this school be reserved for ratings sons, for whom it was intended and for whom the money has been provided throughout the years? In 1957, another and more serious breach was made in the regulations. This time it was to charge fees for what, for over two centuries, had been an orphanage providing both free maintenance and free education. The first fee was £120 per annum but there have been discussions about that being increased—again to the detriment of the ex-Service rating and the widow.
Every parent or guardian, as he or she should do, endeavours to get the fees reimbursed but the results in this case are quite incredible. "Brass hats" pay nothing out of their own pocket yet the widows of ratings have to pay part of the fees for their sons from their miserable pittances and go out to work to get the money. This is another incredible scandal.
The explanation is that serving officers and ratings can get full reimbursement from the naval education allowance. This served last year to cover 322 cases, or nearly half the complement of the school. What happened to the other half, who were largely the sons of ex-naval men—some of whom are disabled or have been invalided from the Service—or of ratings' widows?
A widow can, of course, apply to her local education authority, but some authorities pay only part and others none at all for education which they claim can be given within their own facilities. This applies particularly to Scotland, so that a limited number of boys are entered from Scotland now, whereas in bygone days a large number of boys at the Greenwich Hospital School came from Scotland. The school makes some reductions but there still remain serious cases of hardship for ratings themselves as well as for widows. My hon. Friend the Under-Secretary of Defence for the Navy said something to the effect that, in compassionate cases, consideration was given


so that no hardship would result. I will take other cases in a moment, but I give him an example now.
Some few years ago, a member of the staff of this House was asked to pay fees of £100 per annum. At that time I was being challenged to produce a case but obviously I was not going to produce that one. Here was an ex-Serviceman on the staff of this House, with a meagre pension and the sort of pay he gets here—which is no concern of mine in this argument—being asked by the wealthy Greenwich Hospital to pay £2 a week to educate his son at the Navy's own school. Yet, the captain of his last ship, drawing £3,000 a year, would have been able to get his own son into the orphanage and educated at no expense to himself.
How can this be justified either in equity or in common sense—in particular, in fairness to ex-naval men and the widows of naval men? In one term, 13 of the 64 ratings widows with orphan sons at Greenwich Hospital had to pay fees. How can Greenwich Hospital, the Admiralty and my hon. Friend say that these charges to widows are justified? There are 13 of them, but my hon. Friend and the Department refuse to give details. They say that these ladies are charged because they are out at work and their income is above a certain level. But how do these widows get the money for their children?
I quote the example of a widow with three children. When she goes out to work, she has to get in another woman to look after the children and to pay that woman out of the meagre income she gets. I see wireless going on in the passing of notes from the civil servants to the Minister, but they cannot bypass this argument, for the figure of 13 widows out of 64 paying fees cannot be disputed. It is on record in HANSARD in reply to a Question I put.
Today's estimate shows that £79,000 is to be charged for fees this year as compared with £74,000 last year. The hon. Member for Merton and Morden rightly asked why, and I support him. If the fees have not been increased—and my hon. Friend did not challenge the hon. Gentleman to say that they had—and numbers have not greatly increased, it means that more parents and possibly more widows are paying fees than hitherto. There can be no other explanation

and thus the position about fees being charged is getting worse.
I will concede one point to my hon. Friend to help him in his reply. If he can say that the increase of £5,000 in fees is largely being met by the naval education allowance or by local education authorities, and that there has been no increase in the number of ratings or widows being charged and no increase in the amount of fees already being charged, that will be a satisfactory explanation. Either he or his staff should have come here prepared to give a detailed answer such as I have given to the hon. Member in answer to his question.
What has been the position of widows? One was charged £15 per annum to help make up the sum of £74,000, when that was the figure. Another widow, who had been awarded a war widow's pension of £70 from the Admiralty, then paid it back to Greenwich Hospital for the education of her orphan son at the Navy's own orphanage. Gilbert and Sullivan in "H.M.S. Pinafore" could not have produced a more crazy example than that. Another widow, with, three young children—I have referred to this case before—had to pay £15 per annum. The only equivalent I can give for that is that of stealing the milk from babies' bottles.
What is the rank of the senior officer with a son at Holbrook? I have sent my hon. Friend a list of questions I want him to answer. Last year, his predecessor did not deny that it was a captain. We thus have the incredible position of a "brass hat" with £3,000 per annum having the full school fees reimbursed through the Navy education allowance. He does not pay a penny out of his own pocket. I hope that I will have detailed answers to these questions. If not, I shall put down a series of Questions over the following weeks to get the information. On the other hand, the widow of a rating with only the basic pension of £4 a week has to pay fees into the £4 million capital of Greenwich Hospital.
Is it any wonder that the school does not receive a greater number of applications for entry from ratings' widows and, for that matter, from ex-ratings themselves? This is just what the Admiralty wants. The Admiralty's motto is that it is not looking for orphans. Surely every fair-minded person would argue that no rating's widow should have to


pay any fees for the education of a son at the Navy's orphanage. With no help from the naval education allowance, she is dependent on the local education authority, and any fees then outstanding should be wholly paid out of Greenwich Hospital's annual income, which is now £500,000.
The Admiralty's intentions, even under a Labour Government, are obvious to anyone like myself who has knowledge of the present position and of future trends. These are further to reduce the number of ratings' sons, particularly orphans, and to increase the number of officers' sons. The objects are to have the sons of only serving officers and ratings, so that all the fees are paid out of the naval education allowance; secondly, to have more officers' sons, to the exclusion of ratings' sons, until the result is a school for the sons of officers only with no ratings' sons; and, thirdly, for the ratings' orphanage to become a wholly fee-paying school, with fees paid out of the naval education allowance and with nothing out of the pockets of the officers, so making the school a preparatory school for the entry of cadets into the Navy.
Where will that get us? It will take us back to the previous early entry into Dartmouth College from a limited class of parent, whereas the one object of the democratisation of the Navy was to abolish early entry and take the main entry from the special entry schools so as to widen the range of intake. Here the object is to limit the range of intake.
I will now deal with the argument about the development of the school. It was intended to be a secondary school, and the fact that certain developments have taken place to improve it are all to the good, but they should not put it completely out of the ambit of the boys for whom it was originally intended. An easier way to describe that is to say that if a boy of my type and standard were to apply for Greenwich Hospital School today, he would not be able to get in. [HON. MEMBERS: "Nonsense."] It is no good saying "Nonsense", because I can give dozens of cases. Yet from among my contemporaries came three captains in command of cruisers when the last war started, officers who eventually became admirals.
When it comes to what the school can achieve, there can be no criticism of the previous school at Greenwich and there is no question but that the same class of boy should have entry and be given an education equivalent to that given in other schools. There should have been no question of giving the school the high standards which it has today, with the object of making it a school for the sons of officers only. When the new school was completed, it was said that it was too good for the sons of ratings and should be used for the sons of officers. That proposal could not be steamrollered through right away, and so it has been done piece by piece, with the support and connivance of Labour Party Parliamentary Secretaries.
What should be done? The entry of officers' sons into this seamen's orphanage should be stopped forthwith. Officers are able to enter their sons in any school in the country and to have the full fees paid from the naval education allowance. What more do officers want? Why should the sons of officers—and senior officers at that—be allowed to enter this seamen's orpanhage at the expense of men who have served loyally under them in the Navy and to whom they should owe some loyalty, not competing for places for their sons in this orphanage?
More places would then be available for the sons of serving ratings whose full fees would be paid from the naval education allowance, so that Greenwich Hospital would have no financial problem with those boys. More places would also be available for the sons of ex-Servicemen and particularly for the sons of widows. Surely the Admiralty has a serious responsibility for the education of the sons of disabled men, particularly for orphans. I agree that local education authorities should be asked to reimburse the fees for these boys in whole or in part, but for the orphans of ratings the balance should be paid out of the £500,000 annual income of the hospital. That is one of the objects for which the original funds and the funds built up during the years were provided. In other words, no fees should be charged to the widows of ratings for the education of naval orphans at the navy's orphanage. It is as simple as that.
Whenever social security benefits are discussed in the House, hon. Members on both sides argue that benefits should be


awarded where most needed, that is, to the disabled, the widows and orphans. In fact, a plank in the Conservative Party's present policy is to stop the payment of benefits where they are not needed, in order to provide higher grants for the needy. Why should the Admiralty and Greenwich Hospital have precisely the reverse policy for this seamen's orphanage? In particular, why should the Labour Government continue to support a policy by which "brass hats'" sons get free education at this school, whereas ex-matelots and their widows have to pay fees? Surely this position should be reversed as early as possible and the orphanage returned to its original policy, the policy followed for more than 200 years. This was the free maintenance and education of the sons of seamen slain or disabled in the Service. Equity, common-sense and justice demand that this should be done without undue delay.

11.9 a.m.

Mr. Malcolm MacPherson: I do not want to say very much, but after what my hon. and gallant Friend the Member for Kingston upon Hill, East (Commander Pursey) has said, I must add my voice to the expressions of good wishes towards the school. I should not like the debate to finish with only my hon. Friend's reply to my hon. and gallant Friend's accusations.
My hon. and gallant Friend has started from a premise which he should be leaving by now, the premise that this is an institution and not a school. It was the Navy's orphanage, but I hope that it is not now. I hope that the days of naval orphanages have gone. I hope that even my hon. and gallant Friend will begin to look on this as a school, a place where intelligent and civilised people spend their time educating intelligent and civilised youngsters who will form the next generation, whether they are orphans or not.
My hon. and gallant Friend is at least a testimonial to the worth of the school in his day in the pertinacity which he shows year after year in pursuing his various points, but I do not think that it has usually been found that his cases are borne out. What matters is not whether a certain parent is a widow or a rating. What matters is whether hardship is caused by the imposition of fees. If no hardship is caused, it does not

matter that the parent is a rating and not an officer, or a widow and not a married woman. The policy of the school and of the Foundation has been to avoid the imposition of hardship in any individual case. This has been borne out in all the investigations made by the predecessors of my hon. Friend the Under-Secretary when individual cases have been taken up at the instance of my hon. and gallant Friend.
I hope that we will get accustomed to the notion that the school has moved from its status as an institution to a new status as an ordinary boarding school. When I say "ordinary boarding school", however, it is not quite that. My hon. and gallant Friend referred to its size. It is, I suppose, after Eton, the biggest boarding school in the country. Eton is very much an outsize school, and I do not know that any of the well-known public schools or other boarding schools come up to the size of the Royal Hospital School.
It is not in every respect, therefore, an ordinary boarding school although in most respects it is. It is a school, not an institution. If it bears traces still of its institutional past, one hopes that those will gradually disappear.
With the hon. Member for Merton and Morden (Mr. Humphrey Atkins) and ray hon. Friend the Under-Secretary, I have the pleasure of serving on the Management Committee. The hon. Member for Merton and Morden referred to the growth or development of the sixth form. The sixth form in the school has been so far a comparatively small proportion of the school. The sixth form of many of our major public schools represents, perhaps, half the total number of the boys. At Holbrook, the proportion of the sixth form is nothing like as great as that but it is beginning to move in that direction. This is one of the best of the changes which have taken place.
One of the things which is wanted, in naval or any other kind of education, is a gradual increase in standards, an improvement in the kind of education that is given and encouragement to the boys who feel that there is more and more to be learned at school and that it will be of benefit to them to stay on. That is what is happening all over the country. More and more boys are staying on for their later years in school. It is a healthy


sign that this is happening at Holbrook and I hope that it will be encouraged.
I hope, too, that what might be called the parental diversification, of which my hon. and gallant Friend disapproves, will continue. It is not a bad thing that the children of officers and ratings should be educated at the same school. It would be a thoroughly bad thing to have the children of ratings educated separately from the children of officers and officers' children educated saparately from ratings' children. Indeed, one of the comparative weaknesses of the school seems to me to be that it is essentially a school for the children of parents of a more limited professional type connected with the sea.
The school does not take children whose parents are architects, railway porters, farmers or accountants, for example. It does not take the children of parents from a very wide range of occupations, and this is to some extent a weakness. In the careers followed by its pupils, however, the school is gradually breaking into a wide range of occupations. As my hon. Friend the Under-Secretary has explained, one-quarter of the boys still take up seafaring careers, but the range of other careers that they now follow is just as wide as the range of careers followed by boys from any other school. The more that Holbrook becomes like a very good school for a wide range of boys from a wide range of types of home, the better will be its future.
I should like to add my congratulations to those which have been expressed on the developments which have taken place. The headmaster and the staff deserve congratulation. The school is doing a good job. It is making changes in the right direction. I hope that it will continue to do a good job and will be supported in this, and that it will continue to make changes in the right direction and be supported in doing so.

11.16 a.m.

Mr. Foley: The first question raised by the hon. Member for Merton and Morden (Mr. Humphrey Atkins) was the timing of the debate. Clearly, one cannot disagree that this was an unfortunate day in terms of choice because this was the day on which we had planned to have the meeting of the Management

Committee at the school. This has meant certain alterations in the arrangements of individual members of the committee.
I find it a little difficult to go along with the hon. Member in his strictures concerning the efficiency of the conduct of Government business. Prior to being aware that this debate would take place today, I looked up the debates on this matter over the last 20 years, most of which took place during the time when the hon. Member's party were in Government. Generally, they contrived to have those debates round about midnight or in the early hours of the morning. The fact that we have arranged this debate in such a way that it takes place at least when we are all alert can be regarded as progress in that respect.
As to the frequency of debates, we have heard from my hon. and gallant Friend the Member for Kingston upon Hull, East (Commander Pursey) the need for this annual debate. The hon. Member for Merton and Morden has put an opposite point of view. At least, he is consistent. He put the same view last year and he has maintained it. All I would say is that his remarks were replied to last year by my hon. Friend the then Minister of Defence for the Royal Navy and I have nothing further to add to what my hon. Friend said on that occasion.
Reference has been made to certain items in the estimates, particularly increases in income. There are slight increases in the rents of property but the major increase is due to a switch in our investment policy to commercial properties. The increase of £5,000 in fees reflects no change—we have not altered the fees—but rather a better estimate than we were able to make last year.
Reference has been made to the size of the school and the sixth form and to the work of the staff, particularly the headmaster. I am sure that the House would like to join me in paying tribute to the work of the headmaster and his staff and the excellent quality of their work, which is reflected in the results which I indicated in opening the debate.
As to the size of the school, it is felt that there should be a target of 700. As was indicated, there are about 697 in the spring term. The number of 700 relates to an expanding sixth form, which was mentioned by my hon. Friend the


Member for Stirling and Falkirk Burghs (Mr. Malcolm MacPherson). One welcomes this. It means that youngsters are staying on longer, and that they are taking not merely their 0 levels but their A levels. It enhances the status of the school, and having a virile sixth form contributes to its spirit. It gives the youngsters in the lower forms something to look up to.
My hon. and gallant Friend the Member for Kingston upon Hull, East raised a number of issues which he has raised in previous years. One recognises his depth of feeling on this matter. I do not want to reopen the debate which has been conducted over many years on the origins and orientation of the school. It is clear that we shall not change my hon. and gallant Friend's mind, and I do not think that he will change the mind of the House or of the management committee on this question. He has again implied that there are serious cases of hardship in terms of orphans refused entrance, widows and their fees, and ratings not being able to get their sons into the school.
I am new in this debate and this responsibility. I want to make it quite clear to my hon. and gallant Friend that if he has any specific instances or case which he wishes to raise with me I am at his disposal at any time. But he will do his own cause a great disservice if he generalises without being able to substantiate cases and facts. If there are cases, I am anxious that we should look at them together in a spirit of understanding to see if we can resolve them.
My hon. and gallant Friend was kind enough to send me a number of questions and points of clarification on numbers that he required, and I am only too glad to give them to him because they will be useful to the House as a whole. There are about 695 boys in the school. Seventy-three are cadet entry officers' sons and 622 are sons of ratings and ex-ratings, of whom 159 were promoted to commissioned ranks. There are 83 orphans. Every qualified orphan is offered a place. The idea that somehow we reject orphans because they contribute nothing to the coffers of the Trust is disgraceful, and I hope that the suggestion could never be substantiated and will not be repeated.
In terms of parents, officers' sons, and the payment of fees, all I can say is that

135 serving officers' sons are in the school, 24 from cadet entry and 111 from the promoted ranks. There are 16 ratings' widows paying fees, three of whom have remarried. Contributions range from £16 per annum to £120 per annum. As I said in my opening remarks, none is encountering hardship in making her contributions. If my hon. and gallant Friend or any other hon. Member feels that that is not so, I am willing to discuss any individual case with them at any time.
The debate has, been useful. It has helped us to explain to the House, to whom we are accountable, the workings of the school and the Foundation and to be able to report useful progress.

Question put and agreed to.

Resolved,
That the Statement of the Estimated Income and Expenditure of Greenwich Hospital and Travers' Foundation, for the year ending on 31st March, 1968, which was laid before this House on 11th May, be approved.

CINEMATOGRAPH FILM (LEVY)

11.25 a.m.

The Minister of State, Board of Trade (Mr. J. P. W. Mallalieu): I beg to move,
That the Cinematograph Films (Collection, of Levy) (Amendment No. 5) Regulations 1967, a draft of which was laid before this House on 5th May, be approved.
I think that it would be for the convenience of the House to take with these Regulations the following Regulations:
That the Cinematograph Films (Distribution of Levy) (Amendment No. 2) Regulations 1967, a draft of which was laid before this House on 5th May, be approved.
The regulations are made by virtue of the powers conferred by Sections 2 and 3 respectively of the Cinematograph Films Act, 1957. This Act gave statutory form to a scheme which had been operated voluntarily by the industry since 1950 and which is often referred to as the "Eady Levy". Under these arrangements, Her Majesty's Customs and Excise collect from cinema exhibitors one-ninth of the excess on any seat price over lld., except in respect of educational and charitable entertainments and indoor entertainments in rural areas.
Customs deduct the expense of collection and thereafter the proceeds are paid to the British Film Fund Agency. After


deduction of the cost of administration and after making a payment to the Children's Film Foundation, the Agency distributes the fund to producers of British films in proportion to their earnings.
The Regulations at present in force expire in October of this year. The relevant films legislation was also due to expire in October, but its term was extended by the Films Act, 1966, for a further three years in order to provide time for a comprehensive review of films legislation. The main effect of the regulations now before the House will be similarly to extend for another three years the life of the existing regulations. We propose, however, to take this opportunity to make, as from October of this year, two small changes, both of which are designed to assist the cinemas whose box-office takings are low.
Amendment No. 5 to the Collection of Levy Regulations embodies these two changes. At present, a cinema which takes at the box office no more than £350 in any one week, disregarding takings from charitable, educational and children's entertainment, pays no levy on its takings for that week. The amendment raises the exemption limit to £400. The number of people going to the cinema continues to fall, and both the Cinema Exhibitors' Association and the Association of Independent Cinemas have made representations asking for some measure of relief for the cinema owners. It is not possible to assess exactly what the cost of this proposed raising of the exemption limit by £50 will be, but our estimate for what it is worth, is that the figure will be, in a full year, about £100,000.
The second change gives a new and, I think, more sensible form of relief to cinemas whose takings marginally exceed in any one week the exemption limit. Up to now, cinemas have had to pay into the levy fund the full amount of any excess of takings over the exemption limit whenever such payments are less than they would have to pay if they paid levy at the standard rate. This is a severe discouragement to enterprise and effort to attract more custom.
The amendment now proposed provides a marginal rate of 25 per cent.;

that is, an exhibitor whose takings marginally exceed £400 in any one week will pay 25 per cent. of the excess until levy at that rate equals levy at the standard rate. Again, I cannot give an exact forecast of what the cost of this change will be to the fund, but we estimate that it will be in the region of £200,000.
The effect of the two amendments may be to reduce the fund by about £300,000 in a full year. The fund is at present yielding £4½ million or thereabouts. I believe it is in the best interests of the industry as a whole that these small adjustments should be made. The film studios, I am delighted to say, are busy at present. I do not think that a reduction of this order in the yield of the fund will significantly affect the level of British film production. The increased reliefs will enable some cinemas, which otherwise might have to close, to remain open and this will benefit producers and distributors as well as cinema owners.
Amendment No. 2 simply prolongs the existing arrangements for another three years. Various proposals for amendment of these Regulations have been made and they will all be very carefully considered during the review which is now taking place of film legislation and policy. The Government do not think it right to make changes in the levy distribution arrangements in advance of completion of this review. Accordingly, we propose as regards distribution of levy simple prolongation for three years of the present Regulations.
The Cinematograph Films Council has been consulted and recommended the proposals I have outlined. I hope that they will prove acceptable to the House.

11.32 a.m.

Mr. F. V. Corfield: I understand that the purpose of both these Regulations is to deal on the one hand with the collection of the levy and on the other with its distribution, but I also understand that a certain amount of taxpayers' money goes to support the film industry. Am I right in assuming that what we are dealing with here is merely an adjustment between the payment and collection of the levy and we are not in any way expending any Exchequer contribution which goes to the film industry?

Mr. J. P. W. Mallalieu: That is quite right. No taxpayers' money is involved.

Mr. Corfield: That is what I understood, but I thought I should get it on the record.
The only other point I make is not a criticism in any way of the amendment proposed, but simply to put to the hon. Gentleman that in view of the recent Report by the Monopolies Commission the House will expect in due course to have the Government's views on the Report and to be given some indication of how the Government view the recommendations and what they are doing about implementing them. I do not know whether the hon. Gentleman is in a position to tell us about this, but from what he said about the continuing fall-off in cinema audiences it seems that probably a rather radical review of the present situation is called for.
I should have thought that probably in the more artistic field it might be sensible to bring in the Arts Council for cinemas in exactly the same way as for theatres rather than attempt to subsidise films which, for various reasons, the public do not appear to want to see and to make them economic. This is a wider problem, but if the hon. Gentleman could give some idea of when he hopes to make a statement on the Monopolies Commission Report, it would be helpful. I have no adverse comments to make on the Regulations themselves.

11.34 a.m.

Mr. J. P. W. Mallalieu: I speak again by leave of the House. I am grateful to the hon. Member for Gloucestershire, South (Mr. Corfield). The review of legislation and policy on the film industry will take a considerable time yet, but my right hon. Friend will make a statement on the Government's views on the Monopolies Commission Report very shortly indeed.

Question put and agreed to.

Resolved,
That the Cinematograph Films (Collection of Levy) (Amendment No. 5) Regulations 1967. a draft of which was laid before this House on 5th May, be approved.

Cinematograph Films (Distribution of Levy) (Amendment No. 2) Regulations 1967 [draft laid before the House 5th May], approved.—[Mr. J. P. W. Mallalieu.]

UNIVERSITIES (GOVERNMENT AND STUDENT RIGHTS)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Fitch.]

11.35 a.m.

Mr. Lewis Carter-Jones: I am glad of the opportunity of raising a matter which has concerned me for some considerable time as an ex-university lecturer and one who has had considerable correspondence on the government of our universities and its impact on students. It is obvious that from time to time students will feel indignation. Therefore, one has to be careful about how to take the observations they make, but when carefully considered observations are made indicating that there is something seriously lacking in our universities, I think it time that Parliament brought some attention to them.
I am raising this matter primarily because I understand that new charters are now being provided and certain charters are being redrafted. Consequently, the advice of the Minister is being sought. Therefore, on the basis of past experience and justifiable complaints, future charters ought to contain additional provisions to protect both academic standards and students' rights. This is absolutely essential. Universities are the highest centres of learning. They are the holders of everything which we value in the academic field. I take second place to no one in supporting the work done by the universities and the University Grants Committee, but the universities must not mistakenly defend reaction, inefficiency and muddle. In university life there is much too much which is open to question.
I shall deal with four particular aspects of the problem: first, the question of the standard of instruction or lecturing given to students; secondly, the relationship between the student, the parent and the university, particularly in regard to examinations; thirdly, the fields in which I think there should be greater student participation in the government universities; and, fourthly, the problems faced by students when they are alleged to be in breach of discipline.
I hope that no one in the universities will attack me for undermining their


academic freedom. It is the universities themselves which have decided that lectures shall be the order of the day. It is the universities which have decided that seminars and tutorials shall be held. In no way do I want to interfere with the way in which they organise this work, but they ought to make quite sure, having decided that this is the method by which they are to impart knowledge to students, that the work is properly carried out.
There are large numbers of university lecturers and university staff who carry out an absolutely first-rate job of work, but, unfortunately, there are all too many who are guilty of slipshod, inaccurate, dog-eared, mumbled types of lectures which show no preparation whatever. I have been told by many students that it is no wonder they stay away from lectures as they are so badly prepared and delivered. This is not a defence of academic freedom. Anyone who produces inferior work at the universities, which should be the centres of high standards, deserves our condemnation. This is something which the universities themselves must put right.
The standards of imparting knowledge to students will probably improve when students have a greater say in the running of the universities.
I am not suggesting that universities should be taken over by students or that the university government should be dominated by students. I am merely saying that they should be given a reasonable amount of discussion control, and power. They have a contribution to make which the university itself ought to recognise.
When it comes to sustaining academic integrity a student can quickly become disillusioned because he expects high standards from his lecturers and professors and administrators. Unfortunately this is not always true. Those who try to achieve high standards deserve high honour in our society, and we must guard those standards and that high honour. If something goes wrong within the walls of the university they ought to take immediate steps to rectify it. If in the future things go wrong, the Charter ought to provide for public pronouncement of that which has gone wrong.
It has been drawn to my attention recently that certain examinations which took place last June at Aston University in the Industrial Relations Department were open to question in that the examinations were not conducted as well as they ought to have been. There was good cause for complaint, and complaints were made in June of last year. The university admitted there were errors and they promised to set up a select committee. They did this, and from 12th October to this date there has been glorious silence. I do not believe that any university should hide behind the concept of forgetfulness or sub judice. This is no substitute for honest academic integrity. Something went wrong and the university owed it to its students to reveal what went wrong.
The third field in which I am vitally interested is the right of the student to participate in the government of the university at the highest level. Let me repeat that the university ought not to be run by the students, but at the same time I would argue that the students have a right to active participation in the running of the university itself.
These are young people who are on the threshold of adult life. They are some of our better brains, people of great intellect, and very shortly after leaving the walls of the university they have to accept responsible positions. They take over responsible jobs and many of them become responsible for teaching the young. If the university denies them the right to participate actively in self-government then it is no wonder that sometimes they get turned out from these places of learning without adequate experience of Government.
I do not think that they are asking for a great deal. They are asking for that which many of us would say was a minimum right. I would have thought that in future charters the Minister could strongly advise and recommend that students should be given a much greater say in the running of the affairs of the university.
Sir Eric Ashby, when he talked about students, said:
The student must have expert knowledge. That is what he gets from his lectures and laboratories. He must also have the confidence which comes from participation in community living. That is what he gets from belonging,


as a co-equal, to a society of Chancellor. Masters and Scholars.
Unfortunately, all too often our students are denied the right to participate in this way.
My hon. Friend the Minister of State, who is to reply to the debate, and I were both educated at the University of Wales. It is rather surprising that some of the rights we possessed in our early days before we took on our grey hairs are still being denied to some of the students of our universities today—ordinary, simple, elementary rights. Students were allowed to associate quite freely in our university and yet today in this country we have a situation of responsible young men and women being denied these rights.
It is also highly significant that where students are given rights one tends to get the best type of relationship between the staff and the students. I do not think that this is a paradox. I believe that responsibility begets responsibility and that experience has shown the ability of students and others to make a greater contribution to the wellbeing of the country as a whole. I would ask the Minister to consider very strongly indeed extending the powers and the rights of students.
One other thing I ought to mention is that Ministries and universities tend to have a good method of shelving good reports without acting upon them. I would commend—I have every right since I was sent a copy—that the Department of Education reads again the Hale Report on University Teaching Methods. It will find within this report much that is good. I would urge that in future charters the universities should take account of the teaching methods and criticisms which are made of them in that report.
In conclusion, I should like to refer to the rights of a student when he is being disciplined. I cannot do better than refer to an article by David Gourlay, in The Guardian. He talks about the difficulties which arise and about university responsibility for disciplining students. He says:
The main points of discussion involved a student's right to be informed of charges against him,"—
this is ordinary common justice—
his right of adequate representation, his right of appeal against sentence, and the guarantee that whoever chairs the first disciplinary court

shall not occupy the chair or any subsequent chair of an appeal committee.
He is asking for ordinary, straightforward, common-or-garden justice.
Many universities following the experience of Glasgow University appear to have realised with shock that their procedures, although previously considered 'traditionally adequate', were not necessarily consistent with principles of natural justice.
The universities ought to be the guardians of natural justice and they ought not to deny it to their students. It is the organisation which represents students—the National Union of Students—which has asked for the following code of discipline to be built into every charter. They are straightforward simple human rights: first, there shall be an advance notice of the charges. This is reasonable. Secondly, they should be represented at any proceedings. This, again, is straightforward, ordinary justice. They should have the right to call witnesses in their defence and they should have the right to cross-examine those who bring the charges.
I urge my hon. Friend to consider these requests most carefully. They are the requests of reasonable people. If these young men and women are to go into life, the products of our universities, inadequately trained to accept responsibility, the universities have no one to blame but themselves.
I greatly admire all the work that the universities have done, but they must not be reactionary in the matter of allowing students the ordinary, decent rights which are allowed to others.

11.50 a.m.

Mr. John P. Mackintosh: I want to comment on some of the excellent points which have been raised by my hon. Friend the Member for Eccles (Mr. Carter-Jones). There is a danger in the British community in treating the universities, as we constantly do, as a totally special and isolated element in our institutional structure for higher learning.
I do not take this matter too seriously, but my hon. Friend said that the universities are our special custodians of research and of high standards; but it must be remembered that there are research institutions outwith the universities which do a tremendous amount of the higher level academic work and that there are many


institutions—technical colleges and colleges of education—that teach people to teach and teach people to do all sorts of things and which are quite as high in their standards as that which goes on in universities.
I have often been bothered at the tendency to attribute two different standards of accountability, the right to look after their own affairs, to the universities and to other institutions. It is time we began to look upon universities more as part of a large spectrum of organisations conducting the teaching and the research and stopped giving them this very peculiar privileged position which has led to much of the difficulty in thinking out how they should fit into our educational and social pattern.
From this it is reasonably argued, as I have always argued, that there should be accountability by the universities, because they spend large sums of public money, because they fit into a broad pattern, because they turn people out who go into our society, because they are maintained by public money, because they draw people from the schools. The universities are in a whole chain of the training of people's human experience in certain walks of life, going through from the schools to their ultimate activities.
It is wrong that a particular sector should be singled out and left less accountable than schools, than professional associations, the bodies who produce the young men and women before they go to the universities and which take them on after they leave. This is an anomaly. It stems from a confusion between intellectual freedom, which we would all defend—I would defend it to the last—and the question of how public money should be spent on organising the provision of teaching of research, which is quite another matter.
I often think that oligarchial methods of government are defended in the universities on the quite erroneous grounds that these have something to do with intellectual freedom, the right to pursue one's own researches, the right to train one's students and tell them what one believes to be the truth on any particular academic subject.
I come on to the point raised by my hon. Friend about the standards of teach-

ing. I agree that much rather poor teaching goes on in Britain, not merely in the universities. This is a very difficult problem indeed to handle. It is one of those matters about which one must be fairly brutal. A great deal of the standard of performance depends on the incentive. While university teachers tend to be hired for many virtues, their teaching capacity is not usually one of them; it is not usually something which is rated very highly.
When teaching has been important to university teachers, they have shown that they can perform as well in this field as well as in any other. Years ago the Scottish universities used to remunerate their professors by allowing them to charge a fee of all who took their classes. The result was that the better the lecturer was the more people went to his classes and the higher his fee. The professors then insisted on taking the first-year class, because it was the largest class, with the most students, and the professors performed so well that large numbers of students flocked to hear their lectures. The professors stood at the door and collected the fees as the students entered.
I am not suggesting any particularly crude method of this kind now, but it shows that when the universities were organised in this way a tremendous premium was put on good lecturing. When I taught in an American university the students conducted a popularity poll in a very serious fashion as to which department or professor or lecturer did a very good job, who performed well and who stimulated his students. The department that did well took great pride in ensuring that its new products could lecture.
When I was there, due to one or two other arrivals besides myself, the standard of the department slipped. We became second in the popularity poll. Immediately this was realised, I saw a large lecture hall where the junior members of the lecturing staff of the department took it in turns on the rostrum, while the senior members said, "No, you are inaudible. I cannot hear you from the back row. Speak up. That diagram was too small. The illustration you gave was not clear."This went on until they "revved up" the standard of their own department and got back to the top of the ratings.
Nobody wants to be cheap about this. However, no teaching is given to university lecturers on how to teach. Not a great deal of attention is paid by those who are really good at the craft to showing others. It is almost regarded as an impertinence for a senior to go and hear a junior member of the department lecture. It is regarded as an impertinence to suggest that he cannot be heard from the back row because he is mumbling into his notes.
I myself would not lay much stress on student advice in this matter, because I concede that some of the greatest teachers have been bad teachers. Some of the greatest teachers have stimulated people when one would not have expected them to do so. However, I would expect the heads of universities and the heads of university departments to take a more general interest in the capacity of their staff to teach and help them to overcome what are often elementary defects which can be corrected by a little advice and a little suggestion from those with more experience.
I am very much in agreement with my hon. Friend on the question of charters and student discipline rights. On the question of discipline particularly, one or two principles can be laid down which I would like to see embodied in university practice. What bothers me most is when universities set out to try people for offences which are not necessarily offences according to the law of the land and to punish them; because sending a student down is usually the ultimate punishment.
This is the kind of punishment which denies a man the right to practise as a doctor for the rest of his life. It denies a man the right to be a lawyer or a teacher. It takes away from him much more than a two months' prison sentence or some such sentence would, which might be lived down later. It takes away from somebody the whole right to carry on a certain type of livelihood in a speciality.
In these circumstances, I am doubtful when tribunals of people, whose expertise is in quite another field—an academic field—determine to try people, especially when the offences would not be offences according to the normal law of the land. I suggest that university charters should provide that for all things which are offences before the normal law university

authorities hand over the student to the police.
This is often regarded with horror in university circles. I have listened to university professors at disciplinary committees saying, with hands held up in horror, "This would be a disaster. This would be frightful. We do not want our people to go before normal courts". I do not agree with this. These students are citizens. They are adults. If they have broken the law, they should face the consequences.
The second point about it is that often the police courts are much kinder in the last resort. One or two of the recent rather unpleasant university cases have been cases which the university concerned proceeded with after the police had said that there was not anything on which they, the police, had grounds for prosecution. This was particularly so with the Glasgow students' case. The case was handed over to the police. They said that there was not enough evidence to proceed. Then the university went ahead on its own. This was one of the reasons why I think that the university got landed in very acute difficulties. Universities should confine themselves in their disciplinary activities to what I would call academic offences, which are things like not working properly, not turning up, and cheating at examinations.
For things of this kind, where there are offences which are contrary to the nature of the institutions, I still think that for these offences a procedure should be laid down which accords with natural justice and allows for an appeal to a normal court on the question.
Only in this way can one safeguard oneself from the rather claustrophobic atmosphere which one gets in institutions where people find themselves being tried not merely for a specific offence, but for their general reputation and the fact that they have been troublemakers. The fact that there have been stories about them tends to creep into people's minds; it is hard to keep it out when one is in a small institution, and often evidence or innuendo lurks about in this kind of trial which would not be considered in an outside independent court, trying someone simply for the prescribed offence before it.
One could lay down quite a reasonable code of discipline, which would say that


any offence against the normal law of the land must be tried by the courts. Students would welcome this, and it would put their position very clearly. If there was a "Rag Week" and there was some violence, or a small offence committed, the student in question might be cautioned or fined, or might be imprisoned for a short period. Then he could go back to his work, graduate, and go through life in the normal fashion, wiser and perhaps better behaved. It would be much more serious for him to go before a university court and be deprived of his right to go on with his career, to be sent down for a year, when this would mean his being unable to sit his finals and graduate.
This would lead to a clear-cut procedure which would strip the universities of that irresistible tendency among small corporate bodies, which are continually dishing out advice to people, to believe that in some curious way they know better what is good for young people than the students themselves. There is this tendency always to take on moral offences, to take on things not really punishable by the normal courts.
How could all of this be embodied as students' rights? In this case, the Scottish universities provide a good example, in the concept of the rights of the students' council. I see no reason why this should not be incorporated in subsequent councils. The students could have the right to organise, hold elections and have a representative body. This body could have stated statutory rights to be consulted on all matters concerning status to give their opinions, but not to have powers to enforce them.
I would distinguish between consultative and executive power. One wants to build this into university affairs. In my experience of over 20 years with Scottish universities, the system has produced people who have been most responsible. Quite a number of hon. Members went through this training. On the whole, the people who became president of students' representative councils and President of the Union have gone on to show that they have been leaders in other spheres and responsible members of the community.
We would welcome this. A lot of the trouble that we have recently had would

decline if principals and authorities in universities established a better relationship with students' leaders. Although I support the students' case in this way, theirs is only part of the right to be consulted. A university works through a number of groups. It works through its senior and junior staff and its students. In some cases one might say that its administration plays a distinct part in total policy-making. All of these four elements have their rights and each has a rôle to play. Clearly, some have a directing rôle and others an advisory rôle. One can arrange for this in the charters.
In the last resort I come back to my first point—none of this is a substitute for an element of public accountability for the total position of the universities in our educational structure.

12.5 p.m.

The Minister of State, Department of Education and Science (Mr. Goronwy Roberts): My hon. Friend the Member for Eccles (Mr. Carter-Jones) has raised a question of very great interest, and he has been joined in a most informative and stimulating speech by my other hon. Friend the Member for Berwick and East Lothian (Mr. Mackintosh). It is right that we should debate this matter although, for reasons which I shall give a little later on, I must make it clear that in these matters, rightly in my judgment, there are severe limits on Ministerial responsibility. Nevertheless, I think that some of what I have to say will prove reasonably encouraging to my hon. Friends and others who I know are concerned about this vital matter. It is a matter on which strong feelings have sometimes been expressed, and it is important to try to hold the balance between the various points of view: the point of view of the student, the point of view of the academic authorities, who have the heavy responsibility of running the vast organisations constituted by a modern university, and the point of view of the community at large.
Any discussion of the government of recently created universities inevitably centres round the drafting and granting of their charters, a process which, as my right hon. Friend the Secretary of State indicated in his statement on 9th May, has now been virtually completed, at least


with regard to institutions for which university status is at present contemplated. It is right here that I should point out that it is not possible to alter charters already granted unless the university concerned voluntarily petitions for such alteration. There is no legislation whereby amendments can be forced upon a university, and indeed I think any such legislation would be undesirable, defeating the whole concept upon which charters are granted.
It is fitting therefore that I should confine my remarks to the arrangements for granting charters and to facts as to the provisions they make regarding students and their affairs, and that I should refrain from comment on the merits of provisions in existing charters or on the question of whether these might, with advantage be amended. It will be appropriate, too, that I should limit myself to fairly recent history—to the granting of charters to our distinguished new technological universities, formerly known as C.A.T.s—the colleges of advanced technology—and the central institutions in Scotland, which were the subject of my right hon. Friend's statement on 9th May.
May I take a little time in outlining the process of granting a charter. In the first place, the granting of a charter with its associated statutes, to a new university falls within the Royal Prerogative, following on a petition from the body desiring incorporation. Amendment of an existing charter, in accordance with its provisions regarding amendment, is subject to the approval of Her Majesty the Queen in Council or the Privy Council following, likewise, on an application from the chartered body.
From the side of the new university, the charter would normally be drafted by an Academic Advisory Committee. The members of this committee, appointed by the governing body of the college, in consultation with the University Grants Committee, would be people of academic distinction, well-practised in university affairs, who could be depended on for expert judgments of what would be desirable and practicable in a new university's constitution. A petition for the charter would then be formally lodged, and would be referred by Her Majesty the Queen to a Committee of the Privy Council for its consideration and report.
Notice of that is published in the London Gazette and, in the case of Scottish establishments, in the Edinburgh Gazette also, specifying the period, normally one calendar month, during which representations can be made to the Privy Council Office. I emphasise that it is open to any citizen or organisation at that point to make representations. Any representations which are received are taken into account by the Committee of the Council before deciding on the advice to be offered to the Queen about the granting of the charter.
Under the College Charter Act, 1871, the petition, draft charter and annexed statutes for any new university which have been referred to a Committee of the Council are laid before both Houses of Parliament for a period of one month. While it is open to those drafting a charter to suggest the inclusion of any provision—for instance, for consultation with students on student discipline—the suggested provision may be tempered by Privy Council policy as to general desirability one way or the other or as to practicability—for instance, too much detail could lead to unnecessary work of amendment later—or it could be tempered by the Privy Council because of the need to meet representations made by a third party.
There is in England and Wales no general legislation relevant to university government and my right hon. Friend has no statutory powers in these matters. The position is slightly different in Scotland. Where, then, does the Secretary of State for Education and Science come in? He comes into it because he is, as a Privy Councillor and also as a member of any Privy Council Committee considering university matters, consulted by the Privy Council about all draft charters for new universities. The responsibility, however, for deciding what, if any, amendment is needed in any particular case rests with the Privy Council Committee as a whole.
If deadlock between the Committee of the Privy Council and the petitioners were to be reached in a particular case—happily, this has not so far happened—the only sanction which could be applied would be for the Committee to advise the Queen not to grant the charter. Presumably, in such an improbable case, the petitioning body would come back with an amended statement, which might


meet the wishes of the Privy Council to a greater extent or conclusively.
Turning to the specific issue of student rights, I should like to emphasise the point which I have just made generally that before a charter is granted, full opportunities are given to anyone interested to make representations to the Privy Council. I assure the House that this is no formality. Indeed, in recent instances, numerous representations have been received and considered. As a result of this procedure, a number of amendments have been made to the draft charter and statutes as originally submitted.
An especially important instance concerned the draft charter of the University of Surrey—which, on behalf of my right hon. Friend, I examined in great detail—with regard to which the National Union of Students represented that it wished to see certain provisions included. These were mainly the right to form a students' union not subject to control by the university authorities, to have representation on the governing bodies and to be given a fair hearing in case of disciplinary offences involving suspension or expulsion, with right of appeal to an external body.
What happened was this. With Privy Council concurrence, my right hon. Friend made it known that the Privy Council had put to the sponsors of the new charters who had already applied, and would continue to put to the sponsors in future cases, the desirability, where this had not already been done, of embodying provisions in the charter and statutes to cover the following. This comes reasonably close to what my two hon. Friends have put forward as desirable provisions.
The first provision is that the senate and council of the new universities should be expressly empowered to establish joint committees of themselves and representatives of the student body. The second is that provision should be made whereby a procedure would be laid down for a right on the part of a student who was suspended or expelled to be formally heard by the senate or by a body appointed by the senate before the decision became final. The third is that provision should be made for the establishment of an association representing

the student body. The charters and statutes for all the new technological universities incorporate provisions on those lines.
There have been beneficial results from this exercise on the part of my right hon. Friend. These provisions—indeed, all provisions under a charter—are subject to the general rule of our law that they should be exercised in accordance with natural justice. This point was made forcibly by my hon. Friends who have spoken in the debate. They, like others, have suggested that this, too, should appear in charters. That suggestion rests, however, on a misunderstanding. No authority may lawfully act against natural justice, and it is not for a charter to enjoin that it should be carried out according to what is already the law. Students and universities, like everybody else, are subject to the law and no charter can or should purport to put them above it or separate from it.
I have been referring to the charters of our new universities. I should mention, however, that these are only about one-quarter of all our universities. The rest derive their constitutions from charters granted over a long period of time or, in certain cases, from Acts of Parliament; and these can only be amended if the university authorities themselves apply for that to be done. Neither my right hon. Friend nor the Privy Council can require a university to do this.
Charters and statutes are, however, only part of the fabric of university government, albeit the main structure. Provision is generally made in the charters whereby the university bodies themselves can make ordinances and regulations. Mostly these are not subject to approval by the Privy Council or any other external authority.
Whether the charters and statutes provide, as do those recently granted, an outline of arrangements for student consultation and for procedure in cases of serious breaches of discipline, or whether, as in many earlier cases, they simply confer on one of the university bodies a general responsibility for student discipline, implementation is likely in either case to be through ordinances and regulations and not through a statute annexed to the charter. This is the practicality and the actuality of the position whichever method is adopted.
That is not to devalue the charter and statutes but it is why I have said before, and I am ready to say again, that the onus of evolving a satisfactory relationship with their students rests on the individual university or college authorities and, for the students' part, on a responsible approach by them also to the matter.
If the students feel that they have not an adequate say in their university's affairs or that the disciplinary arrangements need liberalisation, the proper course, which most student bodies take, is to discuss the matter with the university authorities and to come to a workable arrangement. I am sure that any responsible proposal will be given a sympathetic hearing.
Students' well-being and the success of their studies depend largely on the atmosphere in which they work, and no one would deny the importance of ensuring that this is as calm and contented as it can be in a community of young people in an exciting and, perhaps, excitable stage of their lives. Many universities have achieved this and the subject is of great and continuing interest, discussion and action throughout the university world.
There have, however, been highly publicised troubles in one college—-in neither Scotland nor Wales—but I am very glad to say that commonsense and patience have now emerged on both sides of the argument and that there is every prospect that changes will be worked out which will enable that truly great institution to carry on its work with continued distinction.
I am told that there will always be tension between the young and the middle-aged. As the father of two teen-aged students, I do not accept this. Any friction is within student bodies and possibly within staff bodies and not between the two. My experience, having spoken to staff and students of universities, is that there is likely to be variation of view about government in the universities in those two categories. The remarkable fact is that more than half of the university staff are under 40 and a high proportion are under 30.
Universities are places not for massive meek conformity but where work should be done and where it is a privilege to work. They are also organisations whose glory is that they are independent—

neither staff, nor students nor Government would wish it otherwise—and indepedence implies responsibility. As I said to a conference organised on this subject by World University Service recently, the university authorities and the student bodies cannot contract out of the responsibility for finding a viable solution.
The stresses of the dramatic expansion of our universities in the last few years can be eased and removed by the steady search for basic rules and procedures—resilient and not too dogmatic—which will make a reality of joint membership of staff and students of the same community.
My hon. Friend the Member for Eccles also raised some questions which I find it difficult to deal with in this debate, such as that of the conduct of examinations. My right hon. Friend and I have no responsibility for this, which is for the individual university. Examples of laxity or irregularity are happily very rare, as one might expect when universities and their personnel are responsible for the arrangements and when there is a built-in interest in guarding against public accusation of laxity or low standards. Universities have an interest in making the best arrangements so that their examinations and their results are seen to be of the highest possible standard. It would, therefore, be wrong for my right hon. Friend to seek special powers of intervention.
My hon. Friend also referred to the need to improve university teaching methods. As one who has lectured and conducted a few seminars and tutorials, I may have some retrospective vested interest in agreeing wholeheartedly that the vast majority of university teachers do an extremely good job. It is the assumption not only here but in other countries that our university teaching is of a high standard.
Nevertheless, there have been calls, because of recent criticism, for higher standards and training for university teachers—not quite the same as for school teachers, although that is a reasonable analogy. Both the Hale and Robbins Reports made cogent comments and suggestions on this matter and the university world is fully aware of the need to help and train young lecturers to give of their best, whether by lecture, by tutorial, or by seminar.
We should remember that every university has its own techniques. I doubt whether the famous university whose staff was distinguished by the hon. Member for Glasgow, Pollok (Mr. Wright) would entirely agree with the situation in Oxbridge or the University of Wales, where there is a tendency to emphasise the tutorial above that in certain Oxford colleges.
This is the currency not of experimentation but of application. There are basic principles of university education and the widest possible variation in techniques. They are often personal to the tutor in relation to the group which he is teaching. The universities and the University Grants Committee have taken full note of both

Hale and Robbins and there is substantial and fruitful discussions of means of improving teaching methods.
The debate will be examined by all with interest in the subject and I have no doubt that they will take note of what has been said. I expect the students will also note the remarks and suggestions about well-behaved but effective direct action by way of criticism which my hon. Friend the Member for Berwick and East Lothian described so graphically and attractively.
The debate having been concluded, Mr. DEPUTY SPEAKER suspended the Sitting until half-past Two o'clock, pursuant to Order.

Sitting resumed at 2.30 p.m.

Oral Answers to Questions — QUESTIONS TO MINISTERS

Mr. Ridley: On a point of order, Mr. Speaker. I had a Question for Oral Answer down today to the Minister of Labour, and it appeared in the Order Book throughout last week. On coming to the House today I find that it has been transferred to the Chancellor of the Exchequer and appears as No. 114. I received no notice of this transfer. The Question has been on the Paper for, I think, a month or so. Is it in order for Questions to be transferred at such short notice and after so long an interval? I should be most grateful if you, Sir, could tell me how I may have redress against the difficulties which result from such action.

Mr. Speaker: I have some sympathy with the point the hon. Gentleman has raised, but it is not a matter for me.

Later—

Mr. Speaker: At the beginning of the afternoon, the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) raised a point of order in which he complained that his Question, after remaining on the Order Paper for a long time, had been transferred from the Minister of Labour to the Chancellor of the Exchequer. There must be some mistake somewhere. I now have a photostat copy of his Question, which has been put in by himself or his secretary, and it is headed "To the Chancellor of the Exchequer". There seems to have been no transfer.

Mr. Ridley: I am grateful to you for that, Mr. Speaker. The writing is not my own writing. I think that there has been some mistake and I beg your leave to withdraw the allegation that something improper had happened.

Oral Answers to Questions — MINISTRY OF LABOUR

Printing Industry (Industrial Training Board)

Mr Hamling: asked the Minister of Labour whether he will now announce the names of those whom he has

appointed to the industrial training board for the printing industry.

The Minister of Labour (Mr. R. J. Gunter): Until consultations about the scope of this board are complete, I shall not be in a position to decide its membership.

Wages and Salaries (Increases)

Mrs. Renée Short: asked the Minister of Labour how many employees have received wage and salary increases since the introduction of the Prices and Incomes policy; and if he will state the numbers so treated in the following categories, namely, manual workers, non-industrial, industrial and professional civil servants, and other professional employees.

The Joint Parliamentary Secretary to the Ministry of Labour (Mr. Roy Hattersley): I estimate that between the beginning of the prices and incomes standstill and 30th April, 1967, basic full-time weekly rates of wages or minimum entitlements had been increased in industries employing just over 5 million manual workers, though a significant proportion of this total would not received actual increases. Since the standstill, 9,600 professional, 46,600 other non-industrial and 3,100 industrial civil servants have received wage or salary increases. Corresponding information for professional and salaries employees outside the Civil Service is not available.

Mrs. Short: I thank my hon. Friend for his reply. Is he aware that it is the realisation of this situation that caused the massacre of Labour support in the recent local elections? Will he now do everything in his power to ensure that the lower-paid workers, the section of the community that most looks for help to a Labour Government, receive such help?

Mr. Hattersley: I make no comment about my hon. Friend's critique of why the Labour Party lost a measure of support in May. I am sure that she will be consoled to know that between now and the end of the period of severe restraint more than half a million of the lowest-paid workers will receive benefits as a result of the prices and incomes policy.

Manufacturing and Service Industries (Employment)

Mr. Holland: asked the Minister of Labour what has been the change in the numbers employed in the manufacturing industries and in the service industries, between April, 1966, and April, 1967,respectively.

Mr. Hattersley: From monthly surveys covering a sample of employers it is provisionally estimated that between April,1966,and April, 1967, the number of employees in employment in manufacturing industries in Great Britain fell by310,000. The monthly surveys do not cover all service industries and the only reliable estimates for these industries are for June each year. Estimates for June,1967.will become available early in 1968.

Mr. Holland: Is not the Parliamentary Secretary aware that the Selective Employment Tax is failing abysmally in its primary objective of moving people from service industries into manufacturing industries? In these circumstances, will he asked his right hon. Friend to make representations to the Chancellor of the Exchequer to get rid of this iniquitous and futile tax?

Mr. Hattersley: The primary objective of the Selective Employment Tax was to have the tax burden shared more equally between all forms of industry. The secondary objective—the redistribution of employment—can be judged only when the tax has had a longer time to operate.

Selective Employment Tax

Mr. Ridley: asked the Minister of Labour if he will now publish the study his Department is making into the effects of the Selective Employment Tax.

Mr. Hattersley: The Government are continuing to keep a watch on the effects of the Selective Employment Tax, but they are not proposing to produce a study in a form suitable for publication.

Mr. Ridley: In the debate last October the then Parliamentary Secretary said that the Ministry was making a study of this tax and that the results of the study would be laid before the House. In view of the very heavy criticism which this tax is coming under, will not the Government publish some report

as to their own view about the wisdom of continuing this futile fiscal measure?

Mr. Hattersley: This Department is keeping the tax under review, as are the Departments of several of my right hon. Friends. I am sure that the hon. Gentleman will understand that the full effects of the Selective Employment Tax cannot be judged for some years. The publication for which he asks will be appropriate at the end of that period.

Mr. R. Carr: Will not the hon. Gentleman and his right hon. Friend think again about this, because, with the introduction of a major new economic instrument, which is what this is, it is important for the management of the economy, as well as in the general public interest, that we should have regular reports on how it is working?

Mr. Hattersley: I do not disagree with any of that. I simply reiterate that it was always the intention that the tax should have long-term implications. The Report will be appropriate when those long-term implications can be properly made clear.

Earl of Dalkeith: The Joint Parliamentary Secretary keeps saying that the Government are watching the position. Does he not think that he owes it to the House to reveal every now and again what the Government are seeing if they are watching it?

Mr. Hattersley: Perhaps the hon. Gentleman has overlooked the very substantial change in the tax which is embodied in Clause 24 of the Finance Bill. That is surely one of the fruits of the Government's investigation.

Sir J. Rodgers: Is the hon. Gentleman aware that I tabled a Question some time ago asking how many people have, as a result of the Selective Employment Tax, been transferred from service industries to manufacturing or export industries? The hon. Gentleman told me then that he would be able to give me the figures in a few months' time. It is surely essential, not that a period of years should elapse before we have the figures, but that they should be given to the House as soon as possible.

Mr. Hattersley: I think that I told the right hon. Gentleman at that time— I suspect that I shall be telling him the


same later today—that an analysis of the transfer cannot be made at this time because there are many other factors than S.E.T. affecting the movement of labour. Until this sort of problem can be made clear we must wait for the final report.

Mr. Holland: asked the Minister of Labour what assessment he has now made of the impact of the Selective Employment Tax on the employment of the disabled.

Mr. Hattersley: Since the introduction of the Selective Employment Tax, unemployment among the disabled in the service and construction industries has risen at a much lower rate than the general rise in unemployment in these industries.

Mr. Holland: Does not the hon. Gentleman think that to tax the employment of the disabled is an affront to the nation's social conscience? What steps has his right hon. Friend taken to persuade the Chancellor to end this most unhappy situation?

Mr. Hattersley: I am not sure whether the hon. Gentleman means that taxation on the disabled in general is an affront to the nation; if he means that, he should address his question to the Chancellor of the Exchequer. My right hon. Friend is consoled to know that, in all aspects of the policy, the disabled have fared a good deal better than other sections of the community and their employment prospects are no less good than they were before the introduction of this tax. This is the essential factor.

Mr. R. Carr: If we are to give premiums for the employment of anyone, ought we not to give them for the employment of disabled people?

Mr. Hattersley: As I understood him, the right hon. Gentleman is not in favour of giving premiums on any account.

Sir J. Rodgers: asked the Minister of Labour what assessment he has made of the impact of the Selective Employment Tax on the distributive trades.

Mr. Hattersley: It is not possible to make a precise distinction between the effects of the Selective Employment Tax and the results of other items of Government economic policy. The available evidence suggests that in distribution the

tax has led many firms to review their staffing and efficiency but has also contributed to some dismissals of part-time workers; the Government have taken this into account in proposing a partial refund in respect of part-time workers in establishments not otherwise entitled to premium or refund.

Sir J. Rodgers: Is the hon. Gentleman aware that the Economic Development Committee of the distributive trades has conducted an inquiry among firms employing over 300,000 people, and it has found, as he himself has said, that a great many part-timers have been sacked as a result of the S.E.T. and a great many other people have been taken on in full employment who have come from manufacturing industries? Does not this make nonsense of the claim for the Selective Employment Tax that it would lead to the redistribution of manpower, taking people from service industries to the manufacturing industries, particularly exporting industries, and does he not agree with Mr. Aubrey Jones, when he said that the Selective Employment Tax had had an effect on prices but none whatever in providing redistribution of manpower?

Mr. Speaker: Order. Supplementary questions must be reasonably brief.

Mr. Hattersley: The major proposal of the E.D.C. is incorporated in Clause 24 of the Finance Bill. As regards the movement from manufacturing to distribution, as is, I think, inevitable during a period when manufacturing has had certain Government policies directed towards it, there has been a falling off in demand for its services. I have no comment to make on Mr. Aubrey Jones's suggestions, save to reiterate that the Prices and Incomes Board is properly entitled to draw conclusions and make statements which are not in accordance with Government information.

Mr. Fletcher-Cooke: Is it not unfair of my right hon. and hon. Friends to attack Ministers at the Ministry of Labour on tins tax when it is obvious from their answers that they loathe its "guts"?

Mr. Hattersley: I am grateful for the hon. and learned Gentleman's compassion. His conclusions about my thoughts, however, are 100 per cent. inaccurate.

Mr. G. Campbell: asked the Minister of Labour if he will seek to amend the Selective Employment Payments Act so that packing of textiles into special bales for export qualifies for the premium.

Mr. Hattersley: The Government are keeping questions of S.E.T. classification under review, and the hon. Member's suggestion will be borne in mind.

Mr. Campbell: Is not this another example of the anomalies of this tax, which in this case is imposed on an operation which is closely associated with manufacture and exports in a hard-pressed industry?

Mr. Hattersley: The export criterion is quite invalid. Were the tax designed simply to subsidise exports, there would be a breach of our international obligations. The fact that the process is closely associated with manufacture is hardly more relevant. The tax requires it to be a part of manufacture and not merely associated with it.

Mr. Fletcher-Cooke: Is there not a greater anomaly in textiles in that a small company processing rags for textile purposes pays the tax, whereas a large company which happens to wash as well as process them does not?

Mr. Hattersley: If the hon. and learned Gentleman will put down a Question about that, I will answer it.

Manufacturing and Distributive Trades (Unemployment)

Mr. Scott: asked the Minister of Labour what relationship the percentage increase in total registered unemployed from February, 1966, to February, 1967, in manufacturing industry bore to the equivalent figure for the distributive trades.

Mr. Hattersley: In February, 1967, the number of persons registered as wholly unemployed in Great Britain who last worked in manufacturing industries and in the distributive trades were 89·5 per cent. and 60·4 per cent., higher, respectively, than in February, 1966. With the inclusion of persons temporarily stopped in these industries, the percentage increases in total registered unemployed were 147 per cent. and 60·6 per cent. respectively.

Mr. Scott: The increase in manufacturing industry is higher than that in the service industries and the distributive trades. Was not redeployment supposed to achieve precisely the reverse? Does not this again show that redeployment is an absolute myth?

Mr. Hattersley: The hon. Gentleman will realise, on reflection, that figures simply of the type for which he has asked give no real indication of the transfer from one industry to another. I can only answer his Question. The implication he draws from my Answer must be related to its content, which does not in any way substantiate the conclusion he has drawn.

Mr. Ridley: The Joint Parliamentary Secretary has just said that the total number in manufacturing industry has dropped by over 300,000. In view of that, how can he maintain the position which he has just adopted in answer to my hon. Friend the Member for Padding-ton, South (Mr. Scott)?

Mr. Hattersley: Other economic factors besides S.E.T. contributed to the fall in employment in manufacturing. Had it not been for the S.E.T. bonus, the fall might well have been a good deal more than it is.

Weekly Earnings

Mr. Scott: asked the Minister of Labour by what percentage weekly earnings rose between April and October, 1966, in all industries and in manufacturing industry, respectively.

Mr. Hattersley: In all industries and services covered by the Ministry's half-yearly inquiry into the earnings of manual workers, the average weekly earnings of all full-time workers rose by 0·3 per cent. between April and October, 1966. In the manufacturing industries alone, the weekly earnings of all full-time manual workers fell by about 0·6 per cent. during the same period.

Mr. Scott: The supposed aim of the Government is to move people from service industries into manufacturing, but do not those figures make it clear that the freeze has made it impossible for workers to move into manufacturing industries, because earnings there are falling, whereas in all industries they are still rising, albeit gradually?

Mr. Hattersley: I make no comment on the extraordinary period the hon. Gentleman chose to ask about, but even during that period the hourly rates increased. This is the economically significant factor.

Mr. R. Carr: The hon. Gentleman says that the hourly rates increased. By how much did they increase relatively in service industries and in manufacturing?

Mr. Hattersley: I should have to have notice of that question, but the increase was common to both of them.

Scotland (Unemployment)

Mr. Wright: asked the Minister of Labour what is the latest figure in total numbers and percentage for unemployment in Scotland; and how this compares with the corresponding month in 1962.

The Joint Parliamentary Secretary to the Ministry of Labour (Mr. E. Fernyhongh): The figures were 82,903 and 3·8 per cent. in May, 1967, and 76,000 and 3·5 per cent. in May, 1962.

Mr. Wright: Does not the hon. Gentleman agree that these figures are a striking indication that there is a percentage drop in employment for this month, which is the lowest for the last seven years? Do not they deny the statement in the Green Paper that unemployment in the development areas is not developing is unfavourably as in previous periods, and do they not suggest that there is a bleak outlook for Scotland next winter?

Mr. Fernyhongh: I do not know who supplied the hon. Gentleman with the statistics on which he bases his statement that the drop in employment is the worst for seven years. In 1963, for example, 12 months after the year which he chose for his illustration, unemployment in Scotland was 103,749. I hope that what we are doing in the way of investment grants and the S.E.T. premium will bring down the present figure, which I readily accept is very unsatisfactory.

Mr. Dalyell: Is there any indication that some of the unemployed are people between 62 and 65 years of age, who have not, for reasons we can all understand, tried very hard to find employment?

Mr. Fernyhough: I could not reply to that without notice, but it is true that,

because there are wage-related benefits, some of the unemployed are taking longer to look for the kind of job they want than they would have taken had they been on the benefits which were in operation when right hon. and hon. Members opposite were in power.

Mr. R. Carr: Is not the hon. Gentleman aware of the results of the important study published in the District Bank Review today, I think, which show that the new system of investment grants on which he now pins so much hope for the future offers less relative incentive to the development areas than the previous system of allowances?

Mr. Fernyhongh: I readily admit that I am not as up to date in my reading as the right hon. Gentleman is, but I do not accept his conclusion in that respect. The situation in my own constituency is a complete contradiction of that view.

South-Western Region (Unemployment)

Mr. Dean: asked the Minister of Labour what is the latest figure in total numbers and percentage for unemployment in the south-western region; and how this compares with the corresponding month in 1962.

Mr. Fernyhough: The figures were 31, 897 and 2·4 per cent. in May.1967,and 20,016 and 1·5 per cent. In May,1962.

Mr. Dean: Does the hon. Gentleman realise how depressing those figures are, both at this time of year and in comparison with 1962, following, as they do, a winter during which unemployment has in certain months been higher in the South-West than at any time since the war? Does he realise that the new proposal for a premium is not likely to deal with this situation as it gives no help to many of the basic industries of the South-West, including tourism?

Mr. Fernyhough: That has yet to be seen; it is far too early for the hon. Gentleman to draw that conclusion. He will know that, since August, 1966, most of Cornwall and North Devon have formed the South-Western Development Area, and there are now available to them all the attractions which we give to industries to go to those areas where there is need for new employment.

Dr. John Dunwoody: Is not one of the most disturbing features of the rising unemployment figures in the South-West that it is within the South-Western Development Area that they have been highest?

Mr. Fernyhough: Of course, they have been highest there; this is why we are now giving the development area benefits to those parts. We have included them because we consider that they should have the benefits which other areas were previously getting.

Mr. Ridley: Can the hon. Gentleman say how much extra taxation the Southwest region will have to pay as its share of the regional employment premium, if it is £100 million for the country as a whole?

Mr. Fernyhough: Before he rose, the hon. Gentleman knew that I could not answer that. If he requires an answer, he should put a Question down to the Chancellor of the Exchequer, who will, I am sure, try to answer it.

Northern Ireland (Unemployment)

Sir Knox Cunningham: asked the Minister of Labour, what is the latest figure in total numbers and percentage for unemployment in Northern Ireland; and how this compares with the corresponding month in 1962.

Mr. Fernyhough: The figures were 40,336 and 7·9 per cent. in May, 1967, and 36,883 and 7·6 per cent. in May, 1962.

Sir Knox Cunningham: One accepts that employment in Northern Ireland is primarily a matter for the Government of Northern Ireland, but is the hon. Gentleman aware that Her Majesty's Government's economic policy has raised the level of unemployment in Northern Ireland? What steps do they intend to take to help the Government of Northern Ireland to reduce this alarming figure?

Mr. Fernyhough: I accept that the figures are marginally higher in Northern Ireland than they have been, though only marginally so. As the hon. and learned Gentleman knows, for all the years when he sat on this side of the House this problem was almost as bad as it is today. But it is true that Northern Ireland has suffered less relatively as a consequence of the July measures than has the rest of

the United Kingdom, and I assure him that all the resources which are available to development areas are made available to Northern Ireland. Although we do not declare development areas in Northern Ireland, we do what we can to get industry to go there, and I hope that the Northern Ireland Government will decide to accept the principle of the S.E.T. premium.

Sir knox Cunningham: It is the highest unemployment rate in the United Kingdom.

Mr. McNamara: Would my hon. Friend agree that there would be considerably more sympathy for the situation in Northern Ireland if it were felt that the Northern Ireland Government were doing more to deal with the tremendous amount of unemployment, which is spread around the country, and not just concentrating their efforts in a few areas? The establishment of some extra work and employment west of the Bann would get more sympathy on this side of the House.

Mr. Fernyhough: It is true that the Northern Ireland Government have net only a Minister of Commerce but a Minister of Finance, and perhaps some of the questions from Northern Ireland Members addressed to us might be addressed to them.

Mr. R. Carr: Does the Minister realise that his answer to this, as to the preceding Questions, shows that unemployment in the developing areas has risen to higher levels and at a faster rate in this "squeeze" than in 1961–62?

Mr. Fernyhough: If the right hon. Gentleman had listened to the answer I gave to the hon. Member for Glasgow, Pollok (Mr. Wright), he would have known that that was not true.

Sir Knox Cunningham: On a point of order, Mr. Speaker. In view of the unsatisfactory nature of the reply, I shall seek to raise the matter again.

Retrained Workers (Trade Unions)

Sir J. Rodgers: asked the Minister of Labour what proposals he has for securing trade union acceptance of retrained workers.

Mr. Gunter: Training in the various trades taught at Government training


centres is in general the subject of agreement at national level with the two sides of the industries concerned. It follows that a trainee is normally accepted into employment with the co-operation of the appropriate trade union. In some areas, however, there are local difficulties in some trades and with some unions. Efforts are made to overcome these difficulties.

Sir J. Rodgers: I thank the Minister for that reply, and I think that he will agree with me that the industrial training boards are doing a very good job in shortening the period of apprenticeships. What progress has he made, first, at national level, in getting the co-operation of trade unionists, and, more important, as his previous answer suggested to me, breaking down resistance at the local level? What propaganda or other efforts is his Ministry undertaking to break down that resistance?

Mr. Gunter: The hon. Member will understand that I was talking about Government training centres. We have no objections so far as the industrial training boards are concerned. The trade unions are part of them. There are these difficulties with the Government training centres. We should see the matter in perspective. The co-operation of the trade unions over the whole field has been magnificent, but we have just about three spots where, despite all my exhortations and pleading, I do not seem to be getting anywhere.

Executive and Management Appointments (Interviews)

Mr. Winnick: asked the Minister of Labour if, after consultation with both sides of industry, he will introduce legislation to discourage the spread to this country of the type of practice of interviewing applicants for executive and management jobs about their private lives and habits.

Mr. Gunter: No, Sir.

Mr. Winnick: Would my right hon. Friend agree that there is a growing American type of practice in interviewing top management applicants which is highly undesirable? Is his Ministry investigating that type of very undesirable practice?

Mr. Gunter: What takes place between an employer and the person he is interviewing for a job is not within the competence of my Ministry. Legislation is mentioned in my hon. Friend's Question, and my mind boggles at the thought of framing legislation on the subject.

Sir J. Vaughan-Morgan: Would the Minister care to suggest to his hon. Friend that he might introduce the legislation as a Ten-Minute Rule Bill, which would not only tax the Parliamentary draftsmen but would provide the House with light entertainment?

Manpower (Deployment)

Mr. Mawby: asked the Minister of Labour what evidence he has that the increased unemployment during recent months has led to a more effective use of labour.

Mr. Hattersley: Some evidence indicating a more effective use of labour though not of the cause is provided by comparing movements in the Index of Industrial Production and the numbers employed in industries covered by the index. Between September and March, the index remained fairly steady apart from seasonal movements but there was a fall of about 3 per cent. in employment.
We have, however, still to obtain the full benefits of the greater attention now being given to the more efficient use of manpower by employers and trade unions.

Mr. Mawby: Is the Minister satisfied that the Government are on the right tack in deliberately bringing about a high level of unemployment, in the hope, and only in the hope, with a "guesstimate", that it will lead to people going into the industries where they are most needed, when he says that there is very little evidence to show that there has been any beneficial effect of the higher level of unemployment which he announced in an earlier Answer?

Mr. Hattersley: I am completely satisfied that some of the objects of the 20th July measures have been and are being accomplished. I reiterate what I said at the end of my original Answer, that we still have a long way to go, but our hopes are that owing to the co-operation from management and trade unions, those long-term objectives will be achieved.

Overseas Nationals (Industrial Training)

Mr. Dalyell: asked the Minister of Labour what response has been received in his Department from industrial firms to the Government's scheme for industrial training for overseas nationals: and if he will make a statement.

Mr. Hattersley: No applications for industrial training attachments under the terms of the new scheme have yet been received from overseas Governments and we have not yet had occasion to approach individual firms. There was however prior consultation with industry before the scheme was introduced and I am confident of support for it.

Mr. Dalyell: Since this is perhaps the most cost-effective policy of help we can give to countries such as India, can my hon. Friend explain why no applications have yet been received? Is it simply the timing?

Mr. Hattersley: It is simply the timing. It is a few months since the scheme was finally put into operation, and that is no doubt the only thing that has caused the absence of applications. I have no doubt that the applications will come in large numbers, and they will be met.

Manufacturing and Service Industries (Placings)

Mr. John Page: asked the Minister of Labour, of the total number of placings since 1st January, 1967, what percentage has been in manufacturing and in service industries, respectively.

Mr. Hattersley: Between 4th January and 2nd May, 1967, 37·4 per cent. of all placings made by employment exchanges and youth employment offices were in manufacturing, and 42·9 per cent. in service industries.

Mr. Page: Is the Minister aware that that reply, and the reply a bit earlier showing that the numbers of those employed in manufacturing industry have been reduced by 310,000, knocks on the head the Government claim that redeployment will redeploy people from service to manufacturing industries, and proves what the country has been saying for a long time, that redeployment really means unemployment?

Mr. Hattersley: I can only reiterate that the objects of the Selective Employment Tax and their achievement are not easy to distinguish from the general aspects of Government economic policy. I urge the hon. Gentleman to be patient and look forward to the time when a long-term analysis of Selective Employment Tax and its objects proves that it has worked in the way it was intended to work.

Mr. R. Carr: But was it not the object of all the Government's economic policies, not only of S.E.T., to bring about the sort of redeployment which these figures show is not happening?

Mr. Hattersley: Certainly, that was one of the objects of the Government's economic policy. But we have constantly said—and it was said by my right hon. Friend the Chancellor of the Exchequer in his Budget speech which announced the Selective Employment Tax—that the major objects of redeployment and the major achievements could be judged only after some time. That time has not yet elapsed.

Professional and Executive Register

Mr. Moonman: asked the Minister of Labour what was the operating cost for the Professional and Executive Register in 1965 and 1966.

Mr. Gunter: The total cost, including all overhead expenses, was about £475,000 in 1965 and about £575,000 in 1966.

Mr. Moonman: In view of the figures, would my right hon. Friend now say what steps he is taking to make the service really competitive with the rather efficient agencies that operate in private industry?

Mr. Gunter: We are spending a great deal of time and energy on improving the Professional and Executive Register, and a lot of improvement has already taken place. We shall continue to do the same thing.

Mr. Patrick Jenkin: Why has the cost gone up by over 20 per cent., one year upon the other?

Mr. Gunter: There was a salary increase at the beginning of 1966, and we have spent a lot on advertising and drawing the attention of firms to the service.

Mr. Moonman: asked the Minister of Labour how many people applied for assistance to the Professional and Executive Register in 1965 and 1966, and up to the date at which figures are available in 1967; how many were offered work; and what was the total number who eventually accepted employment.

Mr. Gunter: Forty-four thousand, one hundred and seventy-eight people registered for employment during the 12 months ending 1st December, 1965, 51,049 in the 12 months ending 1st December, 1966, and 14,238 in the three months ending 8th March, 1967. No figures can be given of offers of work. Placings in employment during these periods numbered, respectively, 7,860, 7,900 and 1,969.

Mr. Moonman: Would my right hon. Friend agree that while many people on the Register appreciate the enormous work done by the Ministry there is room for improvement? Would he give attention to the ways in which that can be done on the basis of the figures he has submitted?

Mr. Gunter: I can assure my hon. Friend that we shall do everything to improve it. If he has particular ideas about it, I hope that he will communicate with me.

Mr. Kenneth Lewis: asked the Minister of Labour whether he will submit names of those registered with the Professional and Executive Register to private employment agencies where they may have vacancies which they cannot fill.

Mr. Gunter: No, Sir.

Mr. Lewis: Would it not be better for the Professional and Executive Register to co-operate with private agencies so that people could get jobs, rather than that the Register should exist in splendid isolation and provide no jobs?

Mr. Gunter: The hon. Gentleman knows as well as I do that there is a difference in the patterns, conduct and abilities of different agencies. It would be very dangerous to allow public resources to be used over the whole range of these agencies. We would have to discriminate.

National Minimum Wage

Mr. Gwilym Roberts: asked the Minister of Labour what plans he has for introducing a national minimum wage; and whether he will make a statement.

Mr. Marquand: asked the Minister of Labour whether he will publish a White Paper setting out Her Majesty's Government's policy with regard to a possible national minimum wage.

Mr. Gunter: I have no plans at present to publish a White Paper. On the general question I would refer my hon. Friends to the reply given to my hon. Friend the Member for Croydon, South (Mr. Winnick) on 10th April, 1967.

Mr. Roberts: Does not my right hon. Friend agree with me that setting a pattern of living and earnings is the very cornerstone on which a successful prices and incomes policy can be built?

Mr. Gunter: It may well be the cornerstone, but there are many difficulties in putting the cornerstone up. My hon. Friend knows very well that we have been talking for many years about a minimum wage, but when I come to discuss it with my colleagues in industry, will there be the greatest act of voluntary discipline ever recorded in industry so that when the minimum rate goes up there will be no request for the maintenance of differentials? If so, we shall get somewhere.

Mr. Shinwell: Why does my right hon. Friend reject the possibility of introducing legislation for a national wage policy based on a national minimum wage? Can he resurrect the Cabinet paper introduced by myself in 1946, and again in 1947, for a national wages policy? In order to inform hon. Members on the subject, will he ask the Prime Minister to arrange for these Cabinet papers to be placed in the Library of the House?

Mr. Gunter: I should not like to answer the last part of the Question. I do not know enough about it. But I have not rejected the idea of a minimum wage. I do not know whether I am right in revealing it, but I have seen the very valuable paper submitted by my right hon. Friend in 1947. I am trying to point out that this must be a matter of discussion and debate in industry so


that we may arrive at certain conclusions as to the effect of the maintenance of a minimum wage. I agree in principle with my right hon. Friend, but I have some doubt at the moment whether the minimum standard of living—if that is what we are concerned with—might not be better dealt with through social measures.

Mr. McNamara: Does not my right hon. Friend agree that recent efforts made by the T.U.C. are towards the establishment of a national minimum wage based on £15 a week? Before we can arrive at a proper scheme of differentials for experience and qualification, we have to have some minimum on which to base it. Does he not agree that any social security scheme might well be ruined if we do not have a national minimum on which to base it?

Mr. Gunter: I remind my hon. Friend that the debate is going on and that there is great controversy about this matter within the trade unions themselves. It does not need me to remind him that the craft unions have a different view from that of the industrial unions. This debate is going on, and it is my opinion that we shall arrive at a conclusion at some time, but there are an awful lot of difficulties in the way.

Mr. Emrys Hughes: On a point of order. In view of the fact that both the Minister and my right hon. Friend the Member for Easington (Mr. Shinwell) quoted or summarised a Cabinet paper, are we not all entitled to know the contents of that paper?

Mr. Speaker: The hon. Member no doubt noted how the Minister ducked the question.

Gibraltarians

Mr. Wall: asked the Minister of Labour if he will now introduce an entry quota for Gibraltarians.

Mr. Gunter: I have nothing to add to the reply given to the hon. Member on 8th May, 1967.

Mr. Wall: As Gibraltar has been blockaded for over two years, can the right hon. Gentleman state when this matter will be decided? Will he also look at the question of the time taken to issue

work vouchers for Gibraltarians which now, I understand, is about six months?

Mr. Gunter: I have no knowledge of the latter part of that question. I can only repeat that this matter, among other associated problems, is under consideration.

Equal Pay

Mr. Arthur Lewis: asked the Minister of Labour whether he is aware that the Treaty of Rome lays down equal pay for women doing equal work to men; what recent action he has taken to implement this policy and with what results; and whether he will state the estimated costs for the adoption of this policy.

Mrs. Butler: asked the Minister of Labour when he expects to receive the Report of the Working Party on Equal Pay for Women; and if he will make a statement.

Mr. Gunter: The implications of the requirement in the Treaty of Rome in respect of equal pay is one of the matters which has been considered in the technical discussions between officials of the Confederation of British Industry, the Trades Union Congress and my Ministry. I expect to receive a report of these discussions shortly. A reliable estimate of the cost of applying the requirement in the Treaty of Rome would require further information than is at present available.

Mr. Lewis: As General de Gaulle has asked for some declaration of intent to show that we are seriously desirous of entering the Common Market, is not this one step which the Minister could take which would receive the unanimous support of this side of the House and would no doubt receive the support of General de Gaulle and help us to get into the Common Market?

Mr. Gunter: I have my doubts about that proposition. The Treaty of Rome certainly states that there shall be the same pay for the same work, but one of the problems is that it is rather differently interpreted in the various members of the Six, and it is rather difficult to arrive at conclusions.

Mr. Edward M. Taylor: Is the right hon. Gentleman aware that local government officers and many other people in Scotland are interested to know whether


the Treaty of Rome provides for equal pay for equal work done in England and Scotland?

Mr. Biffen: asked the Minister of Labour to what extent it is the objective of the Government's prices and incomes policy to facilitate the principle of equal pay between men and women; and if he will make a statement.

Mr. Gunter: The introduction of equal pay is an objective of Government policy which has to be accommodated within the framework of the prices and incomes policy.

Mr. Biffen: Are not women workers often among the lowest paid? Therefore, if it is the Government's supposed policy to favour the lowest paid in their prices and incomes policy, ought they not to embrace the principle of equal pay? Why are they not doing so?

Mr. Gunter: We accept the principle, but, as the hon. Gentleman knows, discussions, consultations and negotiations are already taking place on this matter and we are awaiting the result, I hope very shortly, of those deliberations.

Mr. Ronald Bell: Would the Minister bear in mind that the principle is that of equal pay for equal work, and that the Royal Commission on Equal Pay found that the value of women's work when engaged in similar capacities was 30 per cent. less than that of men?

Mr. Gunter: This is one of the points of the great argument. What is equal work? Nobody knows the answer.

Workers (Holiday Entitlements)

Mr. Arthur Lewis: asked the Minister of Labour whether, in view of the fact that workers in the Common Market countries receive more bank holidays and have twice as much time off as British workers, he will take steps, by legislation or otherwise, to bring British workers' holiday conditions into line with the Common Market countries; and what would be the estimated costs of these changes.

Mr. Gunter: No, Sir. Holiday entitlements in this country and in the E.E.C. countries vary considerably and it is therefore not possible to make the estimate asked for.

Mr. Lewis: Of course they vary considerably. But the Treaty of Rome states that the better conditions which prevail in those countries of the E.E.C. shall apply. Could not the Minister start the ball rolling by giving in this country the better conditions which are in operation in the countries of the Six to show General de Gaulle that we are intent on getting into the Common Market?

Mr. Gunter: Again I question that proposition. In the countries of the Six there are wide variations in the way in which they deal with annual holidays and other public and bank holidays. It is easy to say that Britain is much worse off in certain respects, but when we add some of the public holidays and bank holidays which are granted in addition to the annual holidays, we are not so bad.

Sir J. Rodgers: Would not the Minister agree—leaving General de Gaulle out of the question—that the British worker has far fewer holidays than his counterpart in Europe? Would he not look into the question and urge his right hon. Friend to do something about it by instituting an extra bank holiday?

Mr. Gunter: I will certainly draw the attention of the employers to that fact so that they can bear it in mind when entering into negotiations.

Employment Statistics

Mr R. Carr: asked the Minister of Labour what proposals he has for obtaining and making available up to date estimates of employment by industry and by region.

Mr. Hattersley: Regional estimates of employees in June, 1966, analysed by industry were published in February, 1967. These annual estimates are based on those national insurance cards due for exchange in June. Owing to the delays in exchanging cards it is necessary to wait for six months before commencing tabulation. Proposals are under consideration for obtaining regional employment estimates more quickly from direct returns by employers. Such arrangements would require a substantial increase in the present sample of regular employment returns from employers.

Mr. Carr: Will the right hon. Gentleman press on as hard as he can with the development which he has mentioned?


Does he not agree, in common with all who serve at the Ministry of Labour, that the sooner we concentrate more on employment rather than unemployment the better it will be? If we are to consider sophisticated economic policies, do we not need a more factual basis for them?

Mr. Hattersley: There is unanimity in the belief that employment statistics—indeed, all sorts of statistics—need improvement, and I am obliged to the hon. Member for his encouragement in the matter.

Racial Discrimination

Miss Lestor: asked the Minister of Labour, in view of the Political and Economic Planning publication, a copy of which has been sent to him, and the report of the Race Relations Board, what action the Minister proposes to take to deal with racial discrimination, pending decision on legislation.

Mr. Gunter: As the House knows, the Government are at present reviewing these matters and consultations are taking place with representatives of the T.U.C., the C.B.I. and the nationalised industries. Meantime it is the long-standing policy of the Employment Exchange Service, described in the P.E.P. report, to ensure that all applicants are considered for employment on merits, regardless of race or colour.

Miss Lestor: I thank my right hon. Friend for his reply. As the Leader of the House has indicated that there will probably be no opportunity to discuss the report of P.E.P. or the report of the Race Relations Board, will my right hon. Friend be making a report to the House on his discussion with the T.U.C. and the C.B.I. in order that that may be discussed?

Mr. Gunter: The first part of the question has been noted by the Leader of the House, who is present. I could not give an undertaking about the second part until I have seen the results of the discussions.

Films (Production, Distribution and Exhibition)

Mr. J. E. B. Hill: asked the Minister of Labour what steps he is taking for greater statistical accuracy to revise

Minimum List Heading 881 of Order XXIII of the Standard Industrial Classification so as separately to distinguish those employees who are engaged upon the production as distinct from the distribution or exhibition of films.

Mr. Hattersley: I am arranging for the statistical classification of activities associated with the production of films to be considered by the inter-Departmental committee which is currently considering suggested changes to the 1958 edition of the Standard Industrial Classification.

Mr. Hill: I welcome the Minister's indication of some action. Will he not agree that it is inconsistent and arbitrary to continue to lump together the process of production with that of exhibition and distribution, since the processes of production are recognised as a manufacturing industry for various other purposes including those of the Factories Acts themselves?

Mr. Hattersley: I am sure that the hon. Gentleman does not want me to make any comment on that suggestion, because the review is in progress. The review should be ready next year and may substantiate—I emphase "may"—his point of view.

Mr. Biffen: Will the hon. Gentleman ask the Committee to consider the question of bottling milk which is not considered to be an industrial process? If an employer bottles milk he pays the Selective Employment Tax and if he bottles beer he gets the premium.

Mr. Hattersley: Because it is a general review of the classifications, both the bottling of milk and the bottling of beer will fall under the review.

Engineering, Furniture and Timber Industries (Training Courses)

Sir R. Russell: asked the Minister of Labour what inquiries were made by the Engineering Industries Training Board and the Furniture and Timber Industry Training Board about the suitability and competence of management training and development courses before they announced that all such courses would qualify for general grant.

Mr. Hattersley: That is a matter for the boards concerned.

Sir R. Russell: When giving grants for management courses, should not the Government make sure that these boards are efficient before distributing public money in this way?

Mr. Hattersley: The two principal boards covered by this Question are not receiving grants from the Government, but are administering grants or levies charged on their constituent firms. It is the Government's view and the object of the Act that the boards should take the opportunity of consulting industry and making sure industry approves of what they do. That is what operates under the present scheme.

Wage Council Awards

Mr. Biffen: asked the Minister of Labour what is the estimated number of workers covered by wage council awards that are expected to become operative on or after 1st July, 1967; what is the average increase in wage rates indicated by these awards; what estimated percentage of workers is already earning above these minimum rates; and if he will make a statement.

Mr. Gunter: It is estimated that there are 970,000 workers in total within the scope of wages councils for which I have approved increases in the statutory minimum rates which are expected to come into operation on or after 1st July, 1967. The unweighted average of the increase in the minimum adult rate is 6·2 per cent. and 6·9 per cent. for men and women respectively. The intervals since the previous increases ranged from 15 months to two years.
Information concerning the earnings of workers covered by these Orders or about the percentage receiving more than the new minima is not available, but I have expressed the view that those receiving more than the new minima should not be paid increases except to the extent necessary to avoid distorting a wages structure based on individual responsibility, merit or performance.

Mr. Biffen: Is not a vital piece of information which the House should have the number who are earning above the minimum rates? What steps is the right hon. Gentleman taking to ascertain this information, if only on a sample basis, and by what means does he assure him-

self that his exhortation that the increases should be confined to those on minimum rates is carried out?

Mr. Gunter: The hon. Member has put his finger on the weak spot of the structure of the wages councils, and that is what we are looking at. Discussions will shortly be entered into with the T.U.C. and the C.B.I. about this and related matters. We have no information about those who are above the minima. The Prices and Incomes Board performed a valuable service on a sample basis by taking the lid off retail prices.

Mr. Ridley: Is the right hon. Gentleman aware that we cannot debate his Orders quashing pay increases made by wages councils because they are not affirmative Orders? In view of the undertaking that all prices and incomes Orders would be debatable, will he take steps to change the law in this respect?

Mr. Gunter: I shall have to take time to consider that.

Industrial Training Facilities (Scotland)

Mr. William Hamilton: asked the Minister of Labour whether, in view of the continuing shortage of skilled labour in Scotland, he will take further steps to increase the availability of training facilities, in particular by industry itself.

Mr. Hattersley: The increase of training facilities within industry is now largely the responsibility of the industrial training boards, which are urgently developing their work in Scotland. The training of adults for skill is, however, normally carried out by the Government training centres, of which Scotland has at present seven, with 1,019 training places, and will have nine with 1,365 places early in 1969.

Mr. Hamilton: Is my hon. Friend aware that those figures are not very satisfactory, although one recognises that they are a considerable increase over the figures for two years ago? What are the factors which account for the tardiness of private industry in the provision of increased training facilities, and will he consider giving further incentives to industry to that end?

Mr. Hattersley: I understand my hon. Friend's concern and have some sympathy


with his general point of view, but I cannot subscribe to the view that private industry has been tardy in developing industrial training in Scotland. Many of the industrial training boards have opened Scottish branches and many training boards have gone out of their way to create group training schemes in Scotland. I am sure most training boards are doing all they can to improve the level of training in Scotland.

Mr. G. Campbell: Are there any plans for further expansion of the nine training boards in Scotland?

Mr. Hattersley: We are examining the possibilities for expansion, but I am sure it will be agreed that from one in 1963 to nine in 1969 is a record of which the Government can be proud.

Disabled Persons (Unemployment)

Mr. Goodhart: asked the Minister of Labour how many men and women on the register of disabled were unemployed in April, 1966; and how many in April, 1967.

Mr. Fernyhough: On 18th April, 1966, 45,192 registered disabled persons (39,650 males and 5,542 females) were registered as unemployed at Employment Exchanges in Great Britain. On 10th April, 1967, the corresponding figure was 58,048 (50,889 males, 7,159 females).

Mr. Goodhart: Is the hon. Gentleman aware that for many disabled this is disaster? Is he aware that it is becoming increasingly difficult for disabled in many areas to get the sort of employment which they need, because of the Selective Employment Tax?

Mr. Fernyhough: I appreciate the hon. Gentleman's sympathy with the disabled and I hope that he will accept that I am at one with him on that. I hope that he will also accept that although the disabled have not been sheltered from the Government's economic measures, the percentage has been no greater than the general increase in unemployment. In other words, the disabled have not fared any worse than the general body of workers.

Mr. R. Carr: Would not the hon. Gentleman agree that while we all have sympathy, we all want action? Do not those figures reinforce the point which I

made earlier—that now that we have adopted the method of paying a premium for some workers, it ought to be paid for all disabled employees?

Mr. Fernyhough: This is not the appropriate time for a discussion of that matter. [HON. MEMBERS: "Why not?"] Because nobody is yet in a position to say what the final consequences of this tax are.

Nationalised Industries (Coloured Workers)

Mr. Goodhart: asked the Minister of Labour what special study he is making of the employment and training of coloured workers in the nationalised industries.

Mr. Gunter: As the House knows, I am discussing with my National Joint Advisory Council, which includes representatives of the nationalised industries, the best means of securing the integration of coloured workers in employment in industry generally.

Mr. Goodhart: Before introducing general legislation, would it not be desirable to make sure that the best employment practices are operated by all public authorities?

Mr. Gunter: Yes, indeed. I accept that we should find out whether there are any malpractices. If they are brought to our attention, we shall deal with them.

Mr. Heffer: While my right hon. Friend is right to ensure that there is no discrimination against coloured workers, I hope that we shall not have anything like a separate register, which, in effect, would be discrimination.

Mr. Gunter: I entirely agree. I would deplore the creation of any kind of separate register.

Railway Workers (Retraining)

Mr. Roebuck: asked the Minister of Labour if he is aware that many skilled railwaymen have no real work to do as a result of modernisation; and whether he will consult British Railways and the appropriate trade unions to work out a programme of retraining for other occupations, inside or outside the railway industry.

Mr. Hattersley: Retraining facilities are already available for workers wishing


to transfer to other occupations inside the railway industry. Suitable workers desiring retraining for work outside the industry can obtain this at Government training centres, of which there are at present 33 with 7,000 training places. By the spring of 1969 there will be 42, with 10,000 training places.

Mr. Roebuck: I recognise the tremendous work which the Government have done. However, is not my hon. Friend aware that there are many rail-waymen who are now not properly employed? Would he not agree that if modernisation is to proceed satisfactorily, it is essential that adequate retraining facilities should be available for men displaced by technological progress? Will my hon. Friend shake up the Railways Board?

Mr. Hattersley: I am conscious both of the need to make technological change and the need to retrain men displaced by it. That is why the Government have announced an expansion in Government training programmes, the full effects of which are embodied in the last part of my Answer.

Mr. Roebuck: asked the Minister of Labour if he is aware that many youths who joined British Railways from school as engine cleaners in the hope of progressing to footplate jobs will not be able to fulfil this ambition as a result of modernisation; and whether he will consult the Secretary of State for Education and Science, British Railways and the appropriate trade unions with a view to the provision of training which will eventually enable these youths to be employed in skilled occupations.

Mr. Hattersley: While long-term prospects of young men entering the industry are good, there are likely to be some short-term difficulties. Where these result in loss of training opportunities the Youth Employment Service will give help as required in finding alternative training opportunities for youths; facilities for retraining in Government training centres are available for suitable adults.

Mr. Roebuck: Is my hon. Friend aware that there are many vacancies in British Railways which are not suitable for boys who enter the service of British Railways with inferior educational quali-

fications? Would it not be a good thing if, instead of hanging around doing nothing, these boys could get educational qualifications so that they could proceed to better jobs?

Mr. Hattersley: While they remain in the industry, their training is very much the concern of the Board. I have already told my hon. Friend that those who leave are having special provision made for them by the officers of the Youth Employment Service.

Mr. William Hamilton: Does not my hon. Friend recognise that there is not much incentive for youngsters to accept training with British Railways so long as the Government pursue the policy of closing British Railways workshops, as they are contemplating doing in a development area in West Fife?

Mr. Hattersley: I would not like anything in my previous Answers to suggest that there are not some substantial long-term gains to be made by boys who choose to enter British Railways and take up craft apprenticeships. The difficulties which I have outlined are immediate difficulties and it is to those that the Youth Employment Service is turning its attention.

Industrial Training (Northern Region)

Mr. Leadbitter: asked the Minister of Labour how many men were trained in the industrial training centres in the Northern Region during the year ended 30th April, 1967; what skills they were trained for; and how many of these men were not found places in the skills they were trained for in the region.

Mr. Hattersley: During the year ended 13th March, 1967, the latest date for which figures are available, 1,131 men completed their training at Government training centres in the Northern Region. Of these, 540 were trained in engineering, 422 in construction and 169 in servicing trades. On 10th March, 1967, 153 men had not yet been placed in their training trades, but more than half have since obtained employment in the skills they had been taught.

Mr. Leadbitter: Although these figures are impressive and my hon. Friend has indicated his concern, will he look into


certain anomalies, such as that about which I have communicated with him and which concerns a man who cannot get into an industrial training centre because he does not have sufficient prior experience and who cannot get a job to get the experience?

Mr. Hattersley: The individual case which my hon. Friend mentions is now under active examination by my Department.

Unemployment (Northern Region)

Mr. Leadbitter: asked the Minister of Labour what are the latest recorded figures for men and women unemployed in the Northern Region; and how these figures compare with the same months in 1961, 1962, 1963 and 1964.

Mr. Fernyhough: As the reply consists of a table of figures, I will, with permission, circulate it in the OFFICIAL REPORT.

Following is the information:

TOTAL NUMBERS OF MEN AND WOMEN REGISTERED AS UNEMPLOYED IN NORTHERN REGION




Men
Women


15th May, 1961
…
20,656
7,453


14th May, 1962
…
31,922
8,549


13th May, 1963
…
44,324
10,817


11th May, 1964
…
30,663
8,777


8th May, 1967
…
38,877
7,751

London Docks (Dispute)

Mr. Kenneth Lewis: asked the Minister of Labour what has been the result of his talks with representatives of employees in dispute in the London docks.

Mr. Gunter: Following my meeting on 1st June with representatives of the Transport and General Workers' Union and the National Amalgamated Stevedores and Dockers, their Ocean Shipowners Tally Clerks Joint Advisory Committee has advised tally clerks to work normally today, and I understand this advice has been followed.

AGE OF MAJORITY (COMMITTEE'S REPORT)

Mr. Driberg: asked the Attorney-General what progress is being made by the Lord Chancellor's Committee en-

gaged in the study of age of majority; how soon he expects that the report and recommendations of this Committee will be available to Her Majesty's Government; whether the report will be published; and if he will endeavour to expedite the work of this Committee.

The Attorney-General (Sir Elwyn Jones): My noble Friend the Lord Chancellor expects to receive in the very near future the report of Mr. Justic Latey's Committee; he intends to have the report printed and laid before Parliament before the Summer Recess.

Mr. Driberg: Would my right hon. and learned Friend convey that very welcome news to the Defence Ministers, since they are awaiting the arrival of this report before deciding the question of an option at the age of 18 for Service recruits who sign on for 12 years at the age of 15?

The Attorney-General: No doubt there is widespread interest in the report, and it will be available before very long.

FOREIGN ORDERS AND DECORATIONS

Sir J. Langford-Holt: asked the Secretary of State for Foreign Affairs whether he will now make a statement on the regulations recently issued by him concerning the wearing of foreign orders and decorations.

The Under-Secretary of State for Foreign Affairs (Mr. William Rodgers): The matter is still under serious consideration but, as I am sure the hon. Member knows, this is not the kind of problem which lends itself to rapid solution.

Sir J. Langford-Holt: Will the hon. Gentleman bear in mind that I have not been hustling his Department, because I have been raising this matter now for seven years? Is he now able to give us a date for when these conclusions will be reached?

Mr. Rodgers: I am sorry that I cannot give a date today. I fully appreciate the hon. Gentleman's concern and persistence in this matter and certainly we will give him an opportunity to look into it further as soon as we possibly can.

MIDDLE EAST

The Secretary of State for Foreign Affairs (Mr. George Brown): With your permission, Mr. Speaker, and that of the House, I wish to make a statement on the Middle East situation.
The House will have learned with deep concern that, early this morning, hostilities broke out in the Middle East. The situation is still unclear. There has been heavy ground fighting on the border of Israel and the United Arab Republic. There has been substantial air activity, including attacks on airfields in the United Arab Republic and elsewhere. There has also been air activity over Israel. There are reports of fighting on other frontiers of Israel.
Our Consul-General in Jerusalem reported earlier this morning that the city was "engulfed in war". Although the United Nations Truce Supervisory Organisation arranged a cease-fire from 12 noon in Jerusalem, the latest information reaching me is that, after some initial success, sporadic firing has broken out again.
I cannot emphasise too strongly how much Her Majesty's Government regret this tragic development. It was precisely in an attempt to avert the risk of such a development that the Government took the step I put before the House on 31st May. As the House knows, we have repeatedly urged, by all means open to us, both Israel and the Arab States to exercise restraint and seek a solution to their problems through peaceful negotiations.
During this morning I have been in touch with the representatives of the United States, the Soviet Union, France and Italy, and, of course, with our mission to the United Nations. This afternoon I shall be seeing representatives of the Arab States and we have also been in touch with the Embassy of Israel.
Our immediate aim must clearly be to bring about an early and general ceasefire. The Security Council has been convened and is about to begin its emergency meeting. I hope that it will proceed immediately to the adoption of a resolution calling for this cease-fire.
The Government's attitude—and the House will, I know, support me in saying this—is that the British concern is not to take sides, but to ensure a peaceful

solution to the problems of the area. In this situation, our interest is the same as that of all those in the area as well as the rest of the world. The House will wish to know that instructions are being given to all our forces in the area to avoid any involvement in the conflict.
The House will also wish to know the position of British subjects in the area. On 23rd May, British subjects in the U.A.R. and Israel and on the west bank of the Jordan were advised to leave unless their presence was essential. This advice was extended shortly afterwards to cover the rest of Jordan. British subjects in neighbouring countries in the area were advised to be ready to leave at short notice.
My information is that, following this advice, most business visitors and tourists in Israel, Jordan and the U.A.R. have left, but that the majority of permanent British residents have probably remained. The Government are in touch with our representatives in all the countries concerned about emergency evacuation plans. All merchant shipping due to pass through the Suez Canal is being advised to delay transit for 24 hours. Our advice will be kept under constant review.
I have received reports of mob attacks on our Embassies in Benghazi, Tripoli and Tunis and on the Consulate in Basra. I am maintaining the closest touch with all our posts and will be raising this with the Arab Ambassadors when I see them later this afternoon. We shall make further reports to the House as the situation develops.

Sir Alec Douglas-Home: The House will be grateful to the Foreign Secretary for making an early statement on this very grave situation. I do not think that anyone who took part in the debate last week will be surprised that this has happened, because we stressed again and again the urgency of the situation.
Can the right hon. Gentleman say any more about the form of the resolution which will be put before the Security Council and about the Government's attitude? First, does it require reinstatement of the United Nations force on both sides of the frontier of Israel and Egypt? Secondly, is there a chance of a four-Power conference being called to limit the scope of the war?
There are many factors of which the House is ignorant, particularly, of course, about the talks which the Prime Minister


had with President Johnson and on the declaration as to the keeping open of the Gulf of Aqaba and what action the Governments have agreed to keep the Gulf open.
I had hoped that the Prime Minister would make a statement today, but, as he has not done so, will the Foreign Secretary arrange for a debate, if necessary tomorrow, so that we may examine the case very carefully?

Mr. Brown: I have some doubts, on the spur of the moment, whether a debate as early as tomorrow would at all assist the situation, or be a good thing for the House, but we will consider the right hon. Gentleman's suggestion. It can be discussed through the usual channels.
The right hon. Gentleman asked what form the resolution would take. As I have said, we are at the moment in consultation with the other members of the Security Council and with the other countries to whom I referred about this matter. I would have thought myself that the right thing to do now is to go as quickly as we can for a straightforward resolution of the Security Council, calling on both sides to observe immediately a cease-fire, and not to tangle it up with other questions. This is being discussed at the moment in New York and those are the instructions that I have given to my noble Friend, Lord Caradon.
The question of calling for reinstatement of the United Nations force is, I would have thought, much more a part of a long-term solution to the problems in the area. What we are faced with is not finding a long-term solution now, but with the short-term problem—the immediate problem—of getting the fighting stopped. It is surely better to go straight for that.
On the question of a four-Power conference, I have made it clear this morning to the representatives of the other members of the four Powers how strongly I think this situation calls for the convening of such a meeting—it could be at United Nations level in New York—and that we should get together. That message has been conveyed to my opposite numbers in their capitals.
My right hon. Friend the Prime Minister will be making a statement on his talks tomorrow, as the right hon. Gentle-

man knows, but the talks to a large extent covered matters other than this.
On the question of a declaration about the Gulf of Aqaba, the right hon. Gentleman will be aware that, important as that was last week, what has now happened has somewhat overtaken it.

Mr. Mayhew: Is my right hon. Friend aware that his statement that Her Majesty's Government have no intention of taking sides in this matter will be widely welcomed?
Will my right hon. Friend also note, in relation to the question of the Gulf of Aqaba, raised by the right hon. Member for Kinross and West Perthshire (Sir Alec Douglas-Home), the grave danger in the new situation of the Government identifying themselves too closely with the Israeli point of view on that point? May we assume, therefore, that the Government's policy now is for diplomatic means to limit and shorten the war without showing partiality to either side?

Mr. Brown: What I have said today I said firmly, and meant, last week. Taking sides on the merits of this issue is not required of us. What is required is to get a situation in which the solution to the problems which undoubtedly exist can be obtained by negotiated methods whereby an equitable arrangement can be arrived at which can honourably be advanced on both sides.
Last week, we were talking about the Gulf of Aqaba, which at that stage looked both to me and to the House as being the likely flash-point and the most important issue to try to take care of if we were to avert a war. We have to recognise that this morning's events have to some extent, though not wholly, overtaken that situation. We now have a war in which the starting point was elsewhere than the Gulf of Aqaba.
The right thing for us to do, with our colleagues on the Security Council and others who have interests in the area, is to work as hard as we can to bring about a general cease-fire as quickly as we can in order that we can talk about the problems that exist.

Mr. Thorpe: Is the Foreign Secretary aware that the widest possible support will be given to any initiative to achieve a cease-fire, preferably through the United


Nations, and, in default of that, outside it?
May I ask, first, what is the position at this moment of the United Nations Truce Supervisory Organisation in view of the report put out by the Israeli Government that the office of that organisation has been overrun by Jordanian troops? Secondly, can the right hon. Gentleman say what civilian cities on either side have been attacked? Thirdly, what is the position of shipping in the Suez Canal at the moment?

Mr. Brown: I am obliged to the right hon. Gentleman for what he said about the importance of trying to get a ceasefire. It is with this that at the moment I shall concern myself more than other things.
As to U.N.T.S.O., I have no firm information that the office has been overrun. I saw the report referred to. At the moment, many reports are coming in, and in the very nature of things one has to wait a little while before one is sure that any of them are accurate. Certainly, U.N.T.S.O. was operating in the Jerusalem area this morning without any question and may well be operating elsewhere, but, frankly, at the moment the situation is too confused. I may be able to tell the House a little more about it tomorrow.
I have no reports at the moment of civilian cities being attacked, although there are a number of reports, some of them I think accurate, about airports which are either in or very near civilian cities being attacked, but there does not appear at the moment to have been any confirmed information about an actual attack upon cities.
Shipping, at the moment, seems to be moving through the Canal, but, as the right hon. Gentleman will have noted, I have advised all British shipping to delay any movement towards the Canal for another 24 hours.

Mr. Shinwell: In view of the failure of diplomatic activities and the failure of the Security Council to come to a decision during the last two or three weeks, may I ask my right hon. Friend whether there is any guarantee that the Security Council will at its next meeting come to a decision and that that decision will not be affected by a veto? In any event, will the decision be of a character

which will prevent the Arab countries from continuing their act of aggression against the State of Israel? They have been in a state of war against Israel for many years.
If there is a failure by the Security Council to promote a cease-fire, are we to witness a situation where the might of the Arab States will overwhelm this small country, to which we have been pledged for many long years against aggression? When people who have recently had discussions with General Nasser talk about not taking sides, is it not more likely that what they mean is not taking sides which will affect the intention of the Arab States, which might mean the destruction of the Jews in the State of Israel?

Mr. Brown: I do not think that it is right to talk about the failure of diplomatic activity. [HON. MEMBERS: "Oh."] What produced the situation this morning it is much too early to say. However, I would just say to the House, and to those who murmured just now, that for two weeks now we have, because of very intensive diplomatic activity, held the situation and prevented war from beginning. I must say that I hoped that this could go on. What began it this morning I do not know; we shall have to find out.
In the end the United Nations and the Security Council must be the one real hope of getting a degree of law and order into the world, and I propose that we should go on to use that organisation for this purpose.

Mr. Shinwell: What a hope!

Mr. Brown: I am not willing at this stage to envisage a failure to get a cease-fire resolution through the Council.
As to not taking sides, I simply mean what I say. I understand my right hon. Friend's emotions and feeling and I am not by any means casting any doubts upon them. I recognise why he holds them. But I am certain that anybody standing at this Dispatch Box at this moment will do more good not only in our own national interest, but certainly in the interests of peace in that area, if he avoids being thought to be taking sides of the merits of the issue.

Mr. Sandys: While doing everything in their power to bring about a cease-fire, and avoiding taking sides in this conflict,


will the Government bear in mind that most of us feel very strongly that any eventual settlement must recognise Israel's right to live as an independent nation?
Secondly, may I ask the right hon. Gentleman whether, now that the International Red Cross has confirmed that poison gas has been used in the Yemen, and in view of the possibility of the extensive use of gas against Israel, he will urgently take up this matter at the United Nations?

Mr. Brown: On the first point, the right hon. Gentleman is repeating much of what was said in last week's debate. None of us on either side of the House said that Israel, like any other nation which has recognised the United Nations and is a full member of it, did not have the right to live. That is the very minimum that we can say in this matter. On the other hand, there are many issues involved here, many problems and many arguable points. I still think that we should do far better at this stage not to revert too much to what we were talking about last week, but to concentrate on reducing passions and emotions so that we can get a cease-fire. This is the big issue.
On the question of the use of gas in the Yemen, as the right hon. Gentleman says, the International Red Cross has now been able actively to confirm this. The whole House will, I am sure, deplore and condemn the use of this agent by any Power in any cause. [HON. MEMBERS: "Hear, hear."] While I do not join the right hon. Gentleman in anticipating any use of it in this conflict—[HON. MEMBERS: "Why?"]—because I think that it would be very silly to do so—the right hon. Gentleman may be quite sure that Her Majesty's Government, in the discussions at the United Nations and elsewhere, will see that full account is taken of what we have now discovered.

Mr. Ellis: Can my right hon. Friend say what his policy is with regard to arms shipments to this area, to either side? Can he tell us what arms over which we have still some control are on their way? Can he tell us how much and to whom, if supplies are already in transit? Also, can he say what his policy in future is likely to be?

Mr. Brown: It has never been the policy to discuss in the open shipments of arms that the country makes to anybody, and I do not think that it would be of much value if I were to do so at this point. However, we have contracts already entered into for shipments of arms to various parts of the area, as have other Governments, and I am urgently in touch with them as to the action that could be taken about this in view of what has happened.

Sir H. Legge-Bourke: Will the right hon. Gentleman bear in mind that, although many of us would entirely agree that the great Powers would be wise to keep out of this dispute if.they possibly can, there is, nevertheless, a very clear distinction to be made between the Palestine Arabs and Egypt, and that the sympathy that some of us may have for the Arab cause is confined to the Palestine Arabs and not to Egypt?

Mr. Brown: Since the purpose at this moment must be to get a cease-fire, and since one of the parties to the cease-fire must be the United Arab Republic, I should have thought that on the whole that question could be regarded as being not too helpful.

Mr. Abse: Does the Foreign Secretary appreciate that the citizens of the State of Israel are composed largely of a remnant of those who were exterminated as a result of the ineffectiveness of international action? Does he further appreciate that if Israel is not to have to depend desperately upon itself it must have some greater assurance that there will be effective international action, particularly in the Gulf of Aqaba?

Mr. Brown: I take note of what my hon. Friend says. I know the area very well, and I know the people very well indeed. I still think that we will serve the cause of peace better by not pronouncing on the merits of the case, as either the Israelis or the Arabs see them at this particular time. Let us get the cease-fire, and then the merits of the case can be argued out. If any of us, whether we are Jews or non-Jews, whether we are Zionists or non-Zionists, whether we have in the past taken a "pro" or "non-pro" Arab attitude, get ourselves into a situation today of arguing the merits, we will thereby only reduce our capacity to help bring about a cease-fire.

Mr. Longden: Do not Her Majesty's Government think it a good thing to take sides between international rule of law and international chaos? Was it not precisely because so many nations refused to take any responsibility whatever and pursued what would be called today the permissive policies—what the Germans called the "ohne mich" philosophy—that the League of Nations petered out in impotence and we had to suffer the Second World War? What are our European allies doing about this?

Mr. Brown: I cannot answer for our European allies. What I am doing is to make quite clear to our European allies, as I have done this morning and in the past, what we together ought to do about it. I certainly take the view that we should be on the side of international law and order and not on the side of international chaos. I certainly take the view that we should be prepared to stand up and be counted for that, even when times are difficult.
I still say to the hon. Gentleman, as I said to some of my hon. Friends behind me, that there is a moment when pontificating against these issues can be counter-productive. I urge upon the House that this is one of those moments.

Dr. John Dunwoody: Would my right hon. Friend not agree that, if the reports that Jordanian troops have occupied the United Nations headquarters in Jerusalem, using force against United Nations troops, are true, this casts very grave doubts on the response of the Arab world to the United Nations' representations, and that this underlines the importance of Her Majesty's Government making direct approaches to other involved Governments?

Mr. Brown: We are in danger of pass-sing judgments too soon on reports that might very well turn out only a little while later to be inaccurate. I therefore urge that we do not do so. One of the reasons why I urge this in the case of Jerusalem is that, despite the report, U.N.T.S.O. was able to organise a ceasefire and was able to get this endorsed by both sides. The fact that there has since been sporadic firing suggests that it has not been all that successful.
On the other hand, it certainly sounds as though it is no longer engulfed in war, and, therefore, it could not have been

wholly taken over. It must be operating to some extent. I urge my hon. Friends and the House as a whole not to be in too great a hurry to pass judgment on reports which, by their very nature, must be slightly suspect.

Mr. Ian Gilmour: While warmly welcoming the right hon. Gentleman's attitude today, may I ask whether it is not nevertheless the case that the present evidence suggests that the fighting was begun by the Israelis?

Mr. Brown: I do not know how the hon. Gentleman is able to form that judgment. The information available to me would most certainly not put me in a position to decide the answer to that question. All my contacts with my colleagues in other capitals this morning—which have been very extensive—make it quite clear that they are in the same position as I am. The position is anything but clear.

Mr. Heffer: Referring to the suggested four-Power meeting, would my right hon. Friend give us an assurance that if such a meeting is held he will press for a complete embargo on the sale of arms to all sides in this conflict? Would he not also agree that all large Powers bear a great responsibility in this situation, precisely because we have been selling arms over the last few years to various States?

Mr. Brown: As I made clear in my speech last week, we have a very much better record when it comes to not disturbing the balance by the sale of arms than some other countries. My hon. Friend will remember that I gave some evidence for that. As to what one should say at the four-Power meeting, at whatever level we can get it, I can only say that I take note of what he said. I have a good deal of sympathy with what is behind it. My hon. Friend had better leave it to see if I can get the conference organised first.

Sir A. V. Harvey: Is it not highly dangerous for anyone to speculate that the Israelis possibly started this war at this stage? In view of the grave danger of this whole situation, will the Foreign Secretary undertake to keep the House informed as it becomes clearer, if it does, even later this evening?

Mr. Brown: It would be ill-advised to speculate either way about how this


began. There are very many possibilities of how it could have begun, and very many possibilities of mismanagement and all kind of things. I canvassed to the House, last Wednesday, the sort of ways in which it could happen without anyone really intending it to happen. One has to keep that as a possibility in mind, too. It would not help at all to speculate on the origins of this. History will settle that for us, I have no doubt.
I said in my original statement that we will keep the House fully informed as things develop. Certainly, my right hon. Friend or myself will make another statement tomorrow, when the situation in some respects may be clearer. But if reports are required at even more frequent intervals than that, as the situation develops, we will certainly give them to the House.

Sir Alec Douglas-Home: I am sure that the House will respond to the request for restraint at this moment. May I return to the resolution before the United Nations? The right hon. Gentleman, perfectly sensibly and rightly, talks in terms of a cease-fire, but the cease-fire will not hold for long unless there is a policing force to maintain it. That is quite certain. Will the right hon. Gentleman at the same time, if he cannot include this in the resolution, see that the machinery is set up for this purpose, or use all his influence in this respect?

Mr. Brown: One of our difficulties over the last week or so, when we did buy a bit of breathing space, was that of getting the necessary number of votes—the right hon. Gentleman is well aware of the mechanics of all this—for carrying any resolution of that detailed kind through the Security Council. This is one of the things that has held it up.
If we were to try to include something of that sort into a cease-fire resolution we should run into the same situation, whereas the immediate need is for a call to all parties to cease fire. It would be wiser to go for that as being likely to be obtainable rather quickly and then to use the time that that buys us to see what arrangements we can then make, by negotiations, and in what form a United Nations presence can be restored to that area, from where, as the right hon. Gentleman knows, I regret so much that was ever removed.

Sir B. Janner: May I ask my right hon. Friend whether, during the negotiations, he will keep in mind the provisions of the Charter, and also the fact that for many years Nasser has said that his intention is to destroy Israel and that the method that he has adopted during the last few weeks, the plans that he has made, appear to be in accordance with that determination, as was the case under other circumstances elsewhere within our own memory? Will he please see to it that the United Nations emphasises what the Charter requires and ensures that it is put into proper operation?

Mr. Brown: I certainly believe that action in the U.N. and elsewhere should be based upon the provisions of the Charter, and for that we shall argue and work.
As to the reference to President Nasser, there are many ways in which what he has said from time to time can be interpreted. I still say to my hon. Friend, knowing very well his deep interest in this, that we shall help the cause he has at heart as well as the cause of peace most, by not getting involved in this at the moment.

Mr. Tilney: Is not what is happening here the strongest possible argument so far for the establishment of a permanent United Nations international peace force, with some teeth?

Mr. Brown: I would have not the slightest difficulty in signing a resolution to that effect. The greater difficulty is to bring it about.

Mr. Raphael Tuck: As the Prime Minister himself has stated that this is a case of one nation being determined to annihilate another nation, that other nation being a member of the United Nations, how can my right hon. Friend talk of the impossibility of taking sides?

Mr. Brown: Because I do not believe that the issue is as black and white or as simple as that.

Mr. Tuck: The Prime Minister said that it was.

Mr. Brown: I have been very careful today, and I was last week, as was my right hon. Friend the Prime Minister, to avoid taking positions that would have inflated emotions. I am, however, bound to say to my hon. Friend that there is a case which the Arabs can


deploy. It is a case which has not only plausibility, but legality and force. If one is to emphasise, as ray hon. Friend has done, one side, one is bound to have to put the other side as well. I do not think that doing this helps very much in a situation in which I want to get the emotions down so that we can get a cease-fire.

Mr. G. Campbell: Will the Government immediately propose the urgent strengthening of the United Nations Truce Supervision Organisation, because it contains the U.N, observers who are now on the ground—this is a practical suggestion—and they will have a vital rôle in obtaining and maintaining the cease-fire?

Mr. Brown: Yes. I do not disagree with that at all, although I am not willing at this moment to pronounce on what form the restored United Nations presence should take. It might be one of a number of forms. There might be a chance of getting the force back on both sides of the border this time instead of one side. It might be that through either a strengthened U.N.T.S.O., or by a combination of both, we can restore it.
It might be that the Secretary-General, either in addition to those two things or as a beginning, should have his own representative in the area. This is not the moment to pronounce upon what the form should be or to assume that any one form is mutually exclusive. These are all possibilities.

Mr. Bellenger: While the whole House recognises the genuine attempts of my right hon. Friend to call a halt to this conflict by diplomatic measures, nevertheless we are quite conscious that they may not succeed. Does not my right hon. Friend therefore think that it would not only be courageous, but would help his efforts, if Britain at this time announced that, while the conflict is on, she will cease to supply arms to either side?

Mr. Brown: I answered that question earlier. There are a number of suppliers of arms, a number of countries with contracts not only signed but in many cases already entered into. This is a problem which affects more than ourselves. I am consulting the others urgently about the action that we should take.

Earl of Dalkeith: Has the Foreign Secretary considered the advisability of the Prime Minister flying out to Cairo forthwith to have personal talks with President Nasser with a view to seeing whether he can assist him to find a solution to the question of withdrawing without losing face, or does he think that that would be a complete waste of time?

Mr. Brown: I am bound to say that a little mischief in me wondered what was the motive in that question.

Mr. Paget: Does my right hon. Friend remember that we tried intervention once in Spain? [HON. MEMBERS: "Nonintervention."] Non-intervention. When he says that the Arab aggressor may have something to be said for him, does he also remember Neville Chamberlain saying that there was something to be said for the Sudeten case in Czechoslovakia? Does he realise that I have horrible memories of the 1930s coming back to me?

Mr. Brown: My hon. and learned Friend may well have horrible memories of the 1930s. So have I. But I believe that we do not make things better for ourselves by assuming that history always repeats itself. There are always differences in the situation, and there are very great differences in this one from the situation with which my hon. and learned Friend is seeking to compare it.

Mr. Heath: I think that the whole House has shared the Foreign Secretary's view that in this confused situation it is too early yet to judge the situation and that he is absolutely right at the United Nations to aim at bringing about a ceasefire at the earliest opportunity. At the same time, I am sure that he is the first to recognise that the cease-fire itself will have to be followed by measures for what the Government described in the debate last week as an equitable settlement.
As so much is at stake in this matter, I humbly suggest to the House that we should share the Foreign Secretary's restraint today. The right hon. Gentleman has recognised that we shall want to debate this issue and its ramifications at a very early opportunity, and we welcome the chance of discussing this now through the usual channels.

Several Hon. Members: Several Hon. Members rose—

Mr. Speaker: Order.

AIRCRAFT ACCIDENTS (PERPIGNAN AND STOCKPORT)

The President of the Board of Trade(Mr. Douglas Jay): Shortly after 10 p.m. on 3rd June, a DC4 aircraft operated by Air Ferry Limited, on a flight from Man-ston to Perpignan, crashed on Mount Canigou when approaching Perpignan. From information at present available, it would appear that there were 88 people on board, all of whom lost their lives.
The investigation into this accident will be conducted by the French authorities. The United Kingdom has appointed an accredited representative and advisers to take part in the investigation and they arrived at Perpignan at 12.30 p.m. yesterday, 4th June.
At about 10.10 a.m. on 4th June, an Argonaut four-engined aircraft operated by British Midland Airways Limited on a flight from Palma to Ringway, Manchester, crashed in a built-up area in Stockport about five miles from the areo-drome. There were 78 passengers and five crew on board. There were 12 survivors, including the captain and one hostess. Preliminary information is that the aircraft was being directed by radar to make a descent on the instrument landing system and that during his positioning the pilot reported himself in difficulties and unable to maintain height. Five members of my Chief Inspector's staff left for the scene of the accident immediately after it occurred and are now conducting an investigation.
It will, of course, under international agreement, be a matter for the French authorities to decide what course to pursue in relation to the accident at Perpignan. I have decided that a public inquiry shall be held into the causes and circumstances of the accident at Stockport.
Further, while the application of United Kingdom standards of safety by operators of United Kingdom registered aircraft is kept constantly under examination, I have today given instructions for a special review of the performance of all such operators.
The whole House will, I know, wish to join me in expressing sympathy with the relatives and friends of all those who have lost their lives in these tragic accidents, and also with the survivors. The

House will, I am sure, wish also to join me in warmly thanking all those who so promptly went to the assistance of the victims of the Stockport crash.

Mr. R. Carr: First, may I associate all those on this side of the House with the right hon. Gentleman's expression of sympathy with those who have suffered as a result of the accident and of gratitude to all those who helped, particularly in the rescue at Stockport yesterday.
While we certainly welcome what the right hon. Gentleman has said about a special inquiry as well as the general inquiries into the accident, may I ask the right hon. Gentleman whether he agrees that it would be very wrong to prejudge or to attach any blame even to particular airlines, aircraft or people and that we must await the outcome of his inquiries before making any judgment?
I should like to ask the right hon. Gentleman one or two further questions. Can he assure the House that, following the completion of those inquiries, there will be full publicity for the causes of the accidents and for any lessons which may be drawn from the findings of the inquiries? Can he give us an unequivocal assurance that such lessons will be put into practice and will be known to have been put into practice?
While stressing that I have no suspicions, let alone information, about the cause or blame for these accidents, and that the request which I am about to make has no direct connection with them, may I ask the right hon. Gentleman to bear in mind the special need to increase air safety and to establish public confidence in it at a time when we are about to enter a new era in air transport, with very large aircraft carrying more than 500 people and the supersonic transports as well?
Will the Government, therefore, take the initiative in calling for a new international review of air safety, with particular reference to the risks of approaching and taking off from airports?

Mr. Jay: As to prejudging the facts in connection with these two tragic accidents, I entirely agree with the hon. Gentleman that it would be unwise to prejudge the facts in any way at present. Nevertheless, I think that there is a general responsibility on my Department and


myself to ensure that everything possible is being done to ensure safety.
As to publicity of the inquiries and their results, the British inquiry into the Stockport accident will be held in public and the report will also, of course, be made public. The inquiry into the accident at Perpignan is the responsibility of the French authorities, but I hope that the maximum public information will be possible.
I wholly agree with what the hon. Gentleman said about general regulations to maintain safety, and this is one of the reasons why I am instituting this special review. I will consider his suggestion for further international discussions on this.

Mr. Orbach: I thank my right hon. Friend for that statement. Would he not spell out the thanks of the people of this country, and particularly of this House, to the police, the fire and ambulance services, the staff of the Stockport Infirmary and the many volunteers who, within seconds of the crash, were helping those people who are at present in hospital and who, I understand from a late report, have recovered slightly from the effects of the crash?
Also, does his statement with regard to the aircraft involved mean that the Argonauts, which are 18 or 20 years old, are at the moment to be grounded until they have been inspected and passed as airworthy by his Department? Last, has not the time come for legislation to enforce some control over travel agencies, particularly those engaged in cheap holiday traffic?

Mr. Jay: I entirely associate myself with what my hon. Friend said about those who went to the aid of the passengers affected by the accident, and I express my thanks to those who so promptly went to the assistance of the victims of the Stockport crash. My hon. Friend asked about certain types of aircraft. It would be much too soon, with the information which we have available at the moment, to make judgments either about particular types of aircraft affected by these accidents or otherwise. We must await the results of the two investigations before we make judgments of that kind.

Sir A. V. Harvey: On the Stockport accident, may I add my voice to those

which have expressed sympathy with those involved? In bringing about the inquiry, will the right hon. Gentleman broaden it at least for the Stockport accident, at least to have a look at the safety division in his own Ministry and also the Air Registration Board which, for example—I do not attach undue importance to it—allows aircraft to operate in six sectors when the flight recorder is unserviceable? This is a technical point, but all these things should be carried out in considering safety.

Mr. Jay: I will look into all these matters. I am not sure that they would be appropriate for the public inquiry, but I will certainly consider them.

Mr. Alfred Morris: Will my right hon. Friend press the private operators concerned to ensure that aircraft similar to those used in these appalling tragedies will be withdrawn pending the outcome of these investigations?

Mr. Jay: I am not convinced, on the evidence before us, that it is necessary to take that step, but, of course, my hon. Friend's anxieties will not be overlooked.

Mr. Lubbock: Is the right hon. Gentleman aware that we, too, would like to express our deepest sympathy with the relatives and friends of those who perished in this tragic accident and our congratulations to the police, the ambulance service and the private citizens who played such an heroic rôle in rescuing the survivors?
Is there not a general question here with regard to the use of these very old aircraft—20 or 25 years' old? Notwithstanding that the DC.4 and the Merlin-engined version, the Argonaut, were extremely successful in their day and flew for many years for B.O.A.C. without accident, has not the time now come to review whether there should be more stringent regulations, not over this type of aircraft, but over the use by independent operators of aircraft of a certain age? Will this be taken into account in the inquiry?

Mr. Jay: I am sure the hon. Gentleman realises that already at present an air operator's certificate has to be given to the airline, and, consequently, the Board of Trade Aviation Safety Division, on the advice of the Air Registration Board, has to give a licence to the individual aircraft.


That is done frequently within periods of less than a year. There are already, therefore, two safeguards in force, but I will consider whether anything further is needed.

Mr. Gregory: As this crash occurred in a highly populated area in the centre of an industrial town, would my right hon. Friend not heed the pleas from both sides of the House about the withdrawal of these aircraft? The general discussion yesterday among the workers on the site was that it was important, if we were to have aircraft landing at holiday and peak times, that they should at least match the efficiency and technical ability of the aircraft of the main airlines.

Mr. Jay: There is no question but that no aircraft or type of aircraft is allowed to operate which is not fully safe. That applies to whatever airport they are operating. The existing regulations should ensure, so far as humanly possible, that this is fulfilled.

Mr. A. Royle: Yes, but is the right hon. Gentleman aware that the Stockport disaster has underlined the danger to people living under the glide paths into international airports? What action are the Government taking to avoid the siting of airports near built-up areas? Will he set up an inquiry into this aspect of the matter, which is causing grave public concern?

Mr. Jay: One of the major factors in deciding the siting of an airport is that it should not be too near a built-up area, for reasons of noise and safety. On the other hand, if it is too far from a built-up area, one is involved in taking over agricultural land and other difficulties. There is a difficult balance to strike here, but I agree that safety is extremely important.

Mr. Mendelson: While agreeing with my right hon. Friend that we should not prejudge the particular issue involved in this investigation, he is no doubt aware that there is now grave and widespread concern about this accident. Will he assure us that the Government will be absolutely ruthless in publishing the facts and figures and making comparisons between different airlines and different owners, quite apart from these two aircraft involved? May I press him further

to ground aircraft of that category pending the result of the inquiry?

Mr. Jay: The results of the inquiry into the Stockport accident will, of course, be published: the whole inquiry will be published. The exact procedure on the other inquiry is, as I said, in the hands of the French authorities. It is just because I have these anxieties in mind that I propose, in addition, to carry out a review of the performance of all these operators. I am not at the moment convinced, without a further examination of the facts, that we need to go beyond that.

Mr. Stratum Mills: Having regard to the very bad safety record of Perpignan Airport, has the right hon. Gentleman power to stop British planes using it, pending the full report of the inquiry? Has he any information about whether this airport has proper devices for keeping in touch with planes, including radar?

Mr. Jay: In the last resort, I would have power to do that for British aircraft and, if a case were made out, I should not hesitate to do so, but it would be wise to await the report before making any final decisions.

Mr. Rankin: While I agree generally with what my right hon. Friend has said and think that we ought not to come to easy judgments at present, is he aware that we are now entering the season when aircraft which have been out of commission for a long time are being rapidly brought into service to carry the holiday crowds to their destinations? Would he not agree that, as many of these aircraft are very old indeed, extra precautions are demanded from his inspectors, and will he see that that is done? Second, in view of these disasters—and we have had too many of them—does he not think that the time has come when he should put an age bar on future service of many existing aircraft?

Mr. Jay: As I said, under the present arrangements the individual aircraft is inspected from time to time by public inspectors and, of course, by the airline. I am sure that, in carrying out those inspections, the inspectors concerned will take into account the considerations which my hon. Friend has put forward.

Mr. Bidwell: Is my right hon. Friend aware that there is currently in circulation a circular issued by the Air Safety Division of his Department which goes into the possibility of making variations in the present system of the certificate of maintenance for civil aircraft being signed by licensed aircraft maintenance engineers only, remembering that these regulations flow from the Southall air crash of 1958? Is he aware that this is causing considerable concern to some of my constituents as well as to the licensed aircraft maintenance engineers, who have made recent representations to my right hon. Friend?

Mr. Jay: I will certainly look into the point raised by my hon. Friend.

Mr. Robert Howarth: Will my right hon. Friend reconsider the answer he gave to an earlier question about the use of Perpignan Airport, which has such a terrible record of aircraft flying into the surrounding mountains that one is bound to wonder whether it is good enough waiting until the French have held their inquiry into this accident? Would not it be possible for his Department now to consider the complete record of this airport with a view possibly to preventing British operators from using it?

Mr. Jay: I am not at the moment satisfied that we need to take action before receiving the report of the inquiry, but I will certainly consider that suggestion.

Mr. Rees-Davies: Is it not right that Perpignan Airport has recently introduced the very latest safety measures and should not that be on the record to put the matter straight? Is it not a fact that there is not, as yet, any evidence to show that age as such has been the cause of trouble in relation to these planes, and will the inquiry look into that aspect?

Mr. Jay: I believe that, in general, expert opinion is to the effect that a general judgment on aviation is not so relevant as an examination of the individual types and individual aircraft.
To answer the hon. Gentleman's question about Perpignan Airport, I am not quite sure what he means by the "latest safety measures", but, certainly, the airport has safety devices and instruments in force.

Mr. Mikardo: In calling for this special review, will my right hon. Friend ensure that it takes into account many other things? Is he aware, first, that most of the general standards of the A.R.B. were laid down a long time ago? Are they good enough in the present and greatly changed circumstances? Secondly, what are the practices and quality of standards of routine maintenance exercised by various operators?

Mr. Jay: Yes, Sir. Certainly the inquiry would include those two issues.

Several Hon. Members: Several Hon. Members rose—

Mr. Speaker: Order. This is an important matter, but I must protect the business of the House. We must move on to the next subject.

Sir G. de Freitas: On a point of order. I beg to give notice that I shall try to raise this matter on the Adjournment.

BILL PRESENTED

PRICES AND INCOMES (No. 2)

Bill to make, in relation to prices and charges and in relation to terms and conditions of employment, further provision to supplement or amend the Prices and Incomes Act, 1966, presented by Mr. Stewart; supported by the Prime Minister, the Chancellor of the Exchequer, Mr. Richard Crossman, Mr. Ross, Mr. Douglas Jay, Mr. Ray Gunter, Mr. Hughes, Mr. Frederick Lee, the Attorney General, and Mr. Peter Short; read the First time; to be read a Second time Tomorrow and to be printed. [Bill 265.]

DEVELOPMENT AREAS (REGIONAL EMPLOYMENT PREMIUMS)

Mr. Speaker: Before I call the right hon. Member for Fulham (Mr. M. Stewart) to move the Motion which stands in the names of the Prime Minister and his right hon. Friends, may I observe to the House that many hon. Members wish to take part in this debate? It will be impossible for me to call them all and I regret that I will have to disappoint some of them.
All who have sent in their names have very good reasons for wanting to speak in this debate. I shall try to make my selection cover as many areas of the country as I can, and right hon. and hon. Gentlemen can help each other and the debate by making their speeches reasonably brief.

4.25 p.m.

The First Secretary of State and Secretary of State for Economic Affairs (Mr. Michael Stewart): I beg to move,
That this House takes note of a proposal for a Regional Employment Premium contained in the Command Paper entitled The Development Areas.
The House today debates for the first time a Green Paper, a statement by the Government not of policy already determined but of propositions put before the whole nation for discussion. This Green Paper approach, as it has been called, has been generally welcomed and certainly we have received from all quarters the most favourable comment and advice—although, of course, there have been very differing reactions, ranging from the most favourable to the least favourable.
At this stage I wish to tell the House that there are certain aspects of this matter on which the Government feel that it would now be right to express a view. For example, I want to recommend to the House—and express it as the view of the Government—that, as a general principle, we should go ahead with the proposal for regional employment premiums, although it has become clear from the discussion and argument of the last two months that if that is done, it ought to be done with certain modifications and that it should be flanked by certain, what I might call, concomitant policies. We will be extremely anxious to hear the

views of hon. Members in all parts of the House about these matters.
In view of the special circumstances which have led to the late opening of the debate, I have explained to the right hon. Member for Argyll (Mr. Noble) that I may have to leave the Chamber for a time, perhaps before he has finished his speech. I hope that he will pardon me. However, I assure him and the House that the Government will listen most carefully to all that is said about this proposal during the debate.
First, let me state what I believe to be the general case for regional employment premiums. Hon. Members will have seen, in Table 2 on page 8 of the Green Paper, the record of rates of wholly unemployed in the development areas, in the rest of Britain and in Britain as a whole. At least one striking fact emerges from this table; that the difference between the percentage of unemployed in the development areas on the one hand and the rest of Great Britain on the other has remained, from 1959 until recently, at about 2 per cent. Whatever the unemployment rate was in the rest of Britain, in the development areas it tended to be 2 per cent. higher—indeed, rising, in 1963, to nearly 3 per cent. higher, although in 1966, because of the great increase in policies directly designed to help the regions, dropping to 1½ per cent. But even allowing for that, it has remained a serious problem. I believe, therefore, that one is justified in saying that although we have a considerable battery of regional policies, this still remains an obstinate problem.
Behind these percentages and figures for the development areas is, as the House knows, a record of human frustration, distress and, indeed, of poverty. The average figure for the development areas as a whole does not immediately reveal the fact that, in certain parts of the development areas, the rate is still very heavy indeed. But to these human considerations one must also add an important economic consideration; that increasingly this country cannot afford to leave manpower in idleness. During the years to come we cannot expect any great increase in the total labour force of the country, but we can expect an increase in the proportion of our population which, by virtue of either youth or of age, is not in the working section of


the population. Therefore, wherever we find this exceptional unemployment, there is a pressing economic reason for trying to solve it.
What we have to ask is whether it is possible to stimulate the economy—to reflate regionally, in fact—in such a manner as shall not threaten the balance of payments, as will not add to taxation and as will not require reductions in other items of public expenditure? That is the problem which faces us. The apparent paradox we have been faced with in recent years has been that we have had periods in which the figure of unemployment in the country as a whole was not such as to cause alarm—indeed, that in some parts there might be a tendency to over-heat the economy—and this has existed side by side with sometimes heavy regional unemployment.
If we have endeavoured to take general reflationary measures to help the afflicted regions, this has been done with the danger that it would cause overheating in other parts and threaten the balance of payments. We are seeking a way out of this dilemma.
In regional employment premiums we have an expedient of that kind. I say deliberately "an expedient", because it should be clear straight away that it is not a remedy for all our regional problems. Indeed, reading through the many comments which we have received, I was reminded of an old-fashioned advertisement—"Monkey brand will not wash clothes". Some people have criticised the regional employment premiums on the ground that they will not immediately provide the regions with better communications, a greater supply of skilled labour, and so on. It is not claimed that they will do so. It is claimed that this is one weapon, but a specially valuable weapon, because it will enable us to get what I call regional reflation without threatening the balance of payments.
Why is that so? For many years we have accepted the proposition that the relation between the amount of money spent by the Government and the amount collected in taxes is not the simple balanced budget relationship with which we were familiar during the years before the war. For many years, we have taken the view that the relationship between the money spent by the Government and the money collected by them should be such

as to give the fullest possible expansion of resources consistent with a healthy balance of payments, and that when extra expenditure called into use resources which would otherwise have been idle without endangering the balance of payments, it was self-financing expenditure. It did not make a budgetary demand in the way that expenditure which did not call into use resources which would otherwise have been idle would do.
If one applies that test to the regional employment premium, it is certainly clear that it is aimed at calling into use human resources which would otherwise lie idle. Secondly, it can be fairly established that it does so in a way which does not threaten the balance of payments. Our usual anxiety about any reflationary measure is that the rise in economic activity will lead to a sucking in of imports. But because this measure is confined to manufacturing processes it will stimulate both export activity and import-saving activity, which is a set-off against any drawing-in of imports.
It is important to notice that this is true of a regional employment premium scheme which applies to manufactures only. It would not be true of one which applied to all forms of economic activity. If, for example, we did something which stimulated activity for which the demand was purely local, we would not get that result.
A further result of this measure will be that the stimulation of activity in the regions will lead to a stimulation of demand generally, and that expansion of demand will spread to the country as a whole. It might be argued that there is a dangerous and generally inflationary element here. But, to some extent, the effect of the scheme proposed will be a movement of business from the other areas of the country to the areas receiving regional employment premiums, which will broadly offset any increased activity which arises outside the development areas from the spread-over of the increased demand within the development areas.

Mr. Robert Sheldon: My right hon. Friend has gone on to say that prices are likely to be reduced and that this is the reason why an inflationary element is not introduced by this £100 million. Will he be dealing with the hopes for reducing prices?

Mr. Stewart: Yes; I shall come to that later. What I have said deals with two of the comments which have come from the management side of industry. Some have objected to this proposal on the ground that it should apply to all economic activities in the region and not only to manufacturing. But that overlooks the fact that if it did that we should not get the greater export activity and import-saving activity. We should be in danger of the measure leading to a sucking-in of imports without any countervailing move.
The other objection raised by a number of critics is that, since we are proposing to spend £100 million in this way, would it not be better to spend it on, say, roads and improved communications or on other ways of improving the infrastructure of the development areas? The answer is that these are not alternatives. Spending money in that way would be admirable in itself, but it would not immediately produce that expansion of export activity and import-saving activity which makes this measure of reflation possible. It would produce that effect later. It would not produce it immediately. It would not be a self-financing operation in the way that the regional employment premium is.
We all hope that the general economic and budgetary situation will so improve that the many other necessary measures in the regions will be taken. But the taking of this measure now does not pre-empt £100 million which might have been spent on something else. It is a measure which stands by itself. Therefore, it is not a well-conceived criticism to say that we should have spent this money on something else. The money was not in a bag waiting to be spent on anything. It arises from the operation itself.

Mr. Joel Barnett (Heywood and Royton): Mr. Joel Barnett (Heywood and Royton) rose—

Mr. Stewart: I hope that my hon. Friend will not intervene too often. I do not want to make a long speech.

Mr. Barnett: Surely the argument would be valid only if the present proposal would have an immediate effect. Is my right hon. Friend arguing that it would have an immediate effect?

Mr. Stewart: Not immediately, in a matter of a few months, except for this,

that the knowledge that this is being done is likely to affect a number of investment decisions. I do not think that it should be disputed that the effect in time will be very much quicker in a measure of this kind than in, say, the construction of roads in the regions.
I come now to the calculated effect. We believe that in a period of between three and five years, it would reduce the disparity between unemployment in the development areas and in the rest of Britain from 2 to 1 per cent. We should hope with other policies to make a reduction of a further ½ per cent. We are in sight, then, of a position in which this serious disparity, which has caused so much misery and has hampered our economic policies for so long, can be removed.
There is an article in the Journal of the National Institute of Economic and Social Research whose calculations of the number of jobs this would provide fall to some extent short of the Government's calculations, but it goes on to say that there would be certain further indirect effects and we are not left very short of the Government's calculations that this would mean 100,000 jobs. The House should notice also that the increase in employment in the development areas is likely to be substantially greater than the reduction in registered unemployment because one effect will be that people who have temporarily withdrawn from the labour market—older people, married women, and so on—will be drawn in and migration from the development areas will be halted by this process.
Now I wish to refer to the reactions we have had from various parts of the country. The trade union movement expressed its firm approval of this proposal and it naturally and very rightly had in mind its effects on unemployment. The view taken on the management side of industry—I do not attempt to conceal this from the House—has, in general, been critical or hostile. I think it fair to say that this is not a unanimous view. I found on a visit to Newcastle last weekend, in discussing this with industrialists, that they took a rather different view from that expressed by industry as a whole.

Mr. Michael Noble: The only region.

Mr. Stewart: The right hon. Gentleman says it is the only region, but what about the Scottish Council for Development and Industry? It recommended certain changes in the scheme to which I have referred and asked whether more could be done about skilled labour and that the scheme should be prolonged. The Government regard both those changes with favour and I shall develop them.
The Council goes on to say—I am sure the right hon. Gentleman, coming from Scotland, will not want to dispute this—that with these changes R.E.P. could become a most potent addition to regional industrial policy in Britain and do much to produce the transformation which is wanted. I do not want to make too much of this, but although management as a whole has been opposed, it is right to point out that it is by no means a unanimous conclusion.

Mr. Ian MacArthur: The right hon. Gentleman has referred to the Scottish Council Report, but he has quoted only one paragraph. There are 55 paragraphs and most of them are critical.

Mr. Stewart: I could not quote the whole 55 paragraphs. I have drawn attention to what I think is the heart of the point the Council makes. It wants certain changes and we propose to meet it on this point. It says that with those changes the effect would be as I have described.
What are the nature of the management arguments against the proposal? They say, first, that it will tend to lead to a waste of labour. This is a serious argument because one of the evils in our economy today is that all too often labour is not economically used. The fear was that any kind of subsidy on unemployment would result in wasteful use of labour. Against this, we must notice that if a man is paid £20 a week the employer gets a premium of 30s., but he still has to find £18 10s. out of his pocket. That is not exactly something which encourages him to make wasteful use of labour.
Secondly, unhappily, in the development areas labour is not one of our scarcer resources. If we are told that the danger is that we will waste labour, have we not to ask to what extent it is being wasted already? It is a waste of labour

in its most depressing form that this proposal is intended to remedy.
In the development areas there is the differential rate of investment grants of 45 per cent., which is a strong incentive to the use of labour-saving machinery. Indeed, it can be argued that since we have free investment grants this exceptional encouragement to capital-intensive industries in the development areas it is reasonable to balance it with something which will give encouragement to labour-intensive industries in the development areas.
Next, it is argued that the whole premium would vanish either in higher wages or higher profits and produce no effect on prices. I think that there may be some confusion here between a higher total wages bill or a higher total sum earned in profits, on the one hand, and the payment of more wages or more profits in return for the same amount of work, on the other. It is certainly true, and this is the point of it, that R.E.P. will produce a rise in the total wages bill and the total amount of profits earned in the development areas. That is what it is intended to do by increasing the amount of economic activity there.
But are there valid grounds for supposing that it will cause more wages to be paid for the same amount of work? In so far as wages are determined by national negotiations this will not be so. In so far as local factors count, we have to notice that the present position of the development areas does not put organised labour in a position to secure a bargain of that kind. Indeed, one looks forward to the time when the difference in bargaining power of labour in different parts of the country will be less than it is, but we have not reached that position today.
The trade union movement, in giving support to this proposal, is very well aware of this. If trade unions or individuals or groups of workers endeavour to make use of the proposal to get more wages for the same amount of work, this would defeat the whole object. They would not get more jobs and the great and powerful interests representing individual men and women in the development areas wish to get more jobs and to increase the wages bill.
The same is basically true of management. There is a greater incentive and


a greater prospect of gain by increasing the economic activity than by trying to get a higher profit for the same amount of work. In so far as prices of goods are fixed nationally, or in so far as they are subject to competition, the manufacturer in the development areas is not in a position to put the price at anything he likes. It will be to his advantage to make use of the regional employment premium to lower prices, or possibly to render in one way or another better service to the consumer and so draw a certain amount of business from other parts of the country.
To some extent the arguments against the proposal cancel each other out. The arguments I have quoted say that it will not be effective because all will be swallowed up in higher wages and profits but I have heard arguments from other areas, not the development areas, expressing anxiety about their position. [HON. MEMBERS: "Hear, hear."] I am coming to this; and I understand its importance. The worry there is that it would be too effective.
This also explains the differing responses we received from certain regions. In going round some of the more prosperous regions, and discussing it with them, I found no doubt at all about the effectiveness of this proposal.

Mr. Eric S. Heffer: Would not my right hon. Friend agree that it is precisely because there have tended to be higher wages in the non-development areas that many skilled workers have left development areas, thus making the position far worse inside development areas? This new proposal can help towards removing this imbalance in the availability of skilled workers. Will not the new proposal be very useful in keeping skilled workers in these areas?

Mr. Stewart: I differ to some extent from my hon. Friend. What has caused the movement of skilled labour from the development areas has been not so much the difference in the wage rate, although it exists, as the fact that the jobs were not there in the development areas. We have had complaints from employers who have gone to the trouble of training men in the development areas and then the men, when trained, have gone off elsewhere.
One advantage of this proposal is that, by increasing the prospect of a job in the development areas, it makes it more worth while to train men in the development areas. It makes it much easier to ask a trade union to look with good will on accepting trainees into the industry if the union feels that the total amount of employment in the area is rising.
One other objection which has been raised is that the scheme is to run for too short a period to be effective. The Government therefore feel—we shall want to listen to what is said in the debate on this matter—that instead of speaking of the scheme being in full force for five years, after which we shall consider the rate and extent to which it might be taken off, it should be in full force for seven years, with the same consideration thereafter. This was a point made by the Scottish Council and by a number of other critics of the scheme.

Mr. J. Bruce-Gardyne: Does the First Secretary of State consider that, if the scheme is to be extended to seven years, it will automatically be tied to the S.E.T. for seven years, because many people would regard it as a deplorable drawback if it were tied to the S.E.T. for seven years?

Mr. Stewart: This is a point which my right hon. Friend the Chancellor of the Exchequer will be dealing with in more detail. I will merely say that this and S.E.T. do not integrally and inevitably fit together. It is true in form that the one has come out of the other, but they are not necessarily inseparable. My right hon. Friend will be developing this point.
Another argument against the scheme is that it cannot be effective because there is not enough skilled labour in the development areas. I was already suggesting to the House what the answer to that is. There is a shortage of skilled labour in the development areas. In April of this year, for example, whereas in most of the country the number of vacancies for skilled men exceeded the number of unemployed skilled men, in the North and Scotland and Wales together there were 2·6 skilled men unemployed for every vacancy. There is, therefore, a supply of skilled labour in the areas waiting to be used.
It is true—we must accept this point—that some employers say that a round


figure like that does not give the whole picture, that they may not be the right type of skills. There is something in this argument. That is why it is necessary to accompany the introduction of R.E.P. by further pressing on with the measures to increase the supply of skilled labour.
We have not been idle in that regard. There are 12 Government training centres in the development areas and two on their fringes; and two-fifths of all the places in Government training centres are in those 14 centres. We shall have another five by 1968. Then, as the House knows, there is a scheme of special help to firms with the cost of training the men when that is done in the development areas.
As a result partly of the working of the Industrial Training Act, of all those young people who left school to take up employment in 1966, 42 per cent. were taking up apprenticeships. This is the highest figure ever recorded. But I was glad to receive, in discussing this matter with the Confederation of British Industry, the suggestion that we should, with the Confederation, further pursue the question of what additional measures can be taken to deal with such shortage of skilled labour as there may be.
The point I have just made about skilled labour illustrates the need for what I call concommitant policies. We noticed the need for that particularly in looking at the reactions we got from the various regions. The House will hardly be surprised to learn that, among the regions, the North, Scotland, Wales and Northern Ireland were firmly in favour of the proposal. More interestingly, but less probably to be expected, the West Midlands, Yorkshire and Humberside, and the East Midlands, agreed with the proposal, though with certain modifications. The North-West agreed in general, though with still more modifications.

Mr. J. T. Price: Hear, hear.

Mr. Stewart: The South-West wanted quite other forms of assistance. The South-East was neutral and doubtful. East Anglia was opposed.

Mr. Noble: The First Secretary of State says that these areas are in agreement. He has not told us who in these areas are in agreement.

Mr. Stewart: I should have made that clear. I was referring to the views of the Regional Planning Councils. After all, I have mentioned both sides of industry. The views of individual economists and industrialists are known to the House from the Press. I think that it is reasonable to take note of the Regional Planning Councils' views here.

Mr. J. T. Price: I loudly indicated my agreement with something my right hon. Friend was saying about the North-West. I want to emphasise this point. The highly theoretical statement my right hon. Friend has now made has no real value or relevance whatever to the problems of the North-West, an area which I have the honour to represent in the House. It will further aggravate the discrimination against the grey areas, which are gravely in need of new industry. It will drag labour away from the areas I represent into development areas and further increase the discrimination now represented by 40 per cent. investment allowances in the development areas and only 20 per cent. in the non-development areas. We are gravely alarmed by this policy which has been put forward.

Mr. Stewart: I have listened carefully to my hon. Friend's intervention. I hope that he will now listen to what I say. I am very well aware of his feelings. I had just reached the point in my speech at which I was coming to this very point, having mentioned the regional reactions. It is not reasonable for my hon. Friend to talk about it being a highly theoretical statement, on the one hand, when clearly what is worrying him is the practical results. He at least is not in the ranks of those who say that this is a piece of Keynsian theory that will have no practical effect. What he is worried about is that it will have, from the point of view of the area with which he is concerned, too much effect.
Let us examine this. The first question—

Dame Irene Ward (Tynemouth): Dame Irene Ward (Tynemouth) rose—

Mr. Stewart: I must get on now.

Dame Irene Ward: The right hon. Gentleman has given way to his own side. What about me?

Mr. Stewart: Let me say at once that the question of the geographical coverage


of the scheme is one on which we shall particularly want to listen to the views of the House, which is why I want to be able to sit down quite soon.

Dame Irene Ward: Dame Irene Ward rose—

Mr. Stewart: No.

Dame Irene Ward: It is very mean of the right hon. Gentleman.

Mr. Stewart: Mr. Stewart: The first question—

Dame Irene Ward: The right hon. Gentleman came to our area, but would not listen.

Mr. Deputy Speaker (Mr. Sydney Irving): Order. The hon. Lady is endeavouring to intervene, but it is clear that the right hon. Gentleman is not giving way. She must resume her seat.

Dame Irene Ward: I shall keep on trying. It is not fair.

Mr. Deputy Speaker: Order. I understand the hon. Lady's interest in this matter, but she must wait to catch the eye of the Chair.

Dame Irene Ward: But how can I ask a most important question—[HON. MEMBERS: "Sit down."] The right hon. Gentleman is a "meanie". He came to our part of the country and would not listen.

Mr. Stewart: I think that—

Dame Irene Ward: The right hon. Gentleman does not know—

Mr. Stewart: I think that the hon. Lady is not winning sympathy for her cause, which is probably what she wants to do.

Dame Irene Ward: No. I only want to know—

Hon. Members: Sit down.

Mr. Stewart: There are two issues on the geographical aspect of the matter—

Dame Irene Ward: Are you a "Dan smith-ite"?

Mr. Deputy Speaker: Order. The hon. Lady feels strongly on this matter, but so do other hon. Members. She is taking an unfair advantage of other Members if she intervenes now. She must await her opportunity and catch the eye of the Chair.

Mr. Stewart: There are two issues raised by the question of geographical coverage. One is whether the boundaries of the development areas themselves ought to be altered. It would not be right for us to embark—

Dame Irene Ward: The right hon. Gentleman is mean.

Mr. Stewart: —on that project before introducing regional employment premiums. I am sure that the House will agree—

Dame Irene Ward: The right hon. Gentleman is very mean.

Hon. Members: Be quiet.

Mr. Stewart: I am sure that the House will agree that it would be wrong to embark on alterations in the boundaries of the development areas without fairly careful consideration of all that is involved, and that, equally, it would be wrong to postpone the operation of regional employment premiums until such a study had been completed. It is fair to say, also—I recognise the problems of certain areas none the less—that one does not find any broad areas of industrialisation outside the development areas where unemployment is so high as to justify a reclassification. That is one question.
Another and more pressing question is raised by what are sometimes called the grey areas. [HON. MEMBERS: "Hear, hear."] These areas are of different kinds. Some are called grey by virtue of an intermediate figure of unemployment, and one might argue that the proper way to deal with them would be by an intermediate rate of regional employment premium. For others, the problem is not so much pressing unemployment, but that they are too dependent on older industries and are not receiving the influx of newer industries which they would wish. For these, it might be said that there was a case for an intermediate rate of investment grant or a tilting of I.D.C. policy in their direction.
The grey areas are not all the same in their problems, and the kind of help which they need is not all the same in this case. It seems to me, therefore, that the right thing to do when we introduce the regional employment premium is, at the same time, to carry out a proper study of our regional problems and the effect of


the whole gamut of regional policies which we have had. Over the years, successive Governments have introduced particular elements of regional policy. It is time now to look at their effect generally and to study particularly the problems of the grey areas, bearing in mind that, while regional employment premiums would help the development areas, one can use I.D.C. policy to prevent what is being done in the development areas from bearing unfairly to the disadvantage of areas which have their own problems although they lie outside the development areas as such.
We have still to listen to the debate, but, perhaps, I should make clear that it is the Government's view that we should go ahead with this policy, with certain modifications and concomitant policies, as I have said, in particular, the lengthening of the period from five to seven years, an increased drive to deal with the skilled labour problem, and the speedy initiation of a study of regional problems, bearing particularly in mind the problem of the grey areas and of the actual boundaries of the development areas themselves.
In one's desire to get a tidy and coherent policy, one can sometimes fall into the error of supposing that one must never do anything until one has made sure that the step being taken is exactly in line with everything else one might do. It is to avoid this error that, in my view, we should go ahead with the regional employment premiums—I hope that the House will deal with that fairly expeditiously—the other matters being considered at the same time. I lay great stress on the importance of speedy examination, as speedy as the depth of the problem allows, of all these other questions. It is in that spirit that I commend the proposal to the House.

Mr. Charles Mapp: Mr. Charles Mapp (Oldham, East) rose—

Mr. Deputy Speaker: Order. Mr. Michael Noble.

5.6 p.m.

Mr. Michael Noble: We have moved from questions of great national and international importance to a subject which is of deep interest to all of us in the country, whether we live in a development area or not. The First Secretary of State spoke fairly shortly, and I shall

try to do the same, because, as Mr. Speaker told us, there are many hon. Members wishing to take part. If, in that process, I have to put my arguments somewhat in verbal shorthand, I hope that I shall be forgiven.
The right hon. Gentleman made some kind reference, if I may put it like that, to the Scottish Council (Development and Industry). It said that this was an economist's argument. So it is. I have spent the weekend reading, almost continuously, articles by economists, some praising the regional employment premium and a great many opposing it. In favour of the proposal is the argument, which is now accepted on both sides—I am glad that it is, thought it is the only one that is accepted—that there is a real need in the country for a balance in employment between the development areas and the other areas of the country. Everyone has known this for 20 years. Thank goodness we are at last all agreed on it.
Beyond that point—I have read all the articles with great care—-there is practically no agreement between one set of economists and the other. One side tells us that this new proposal will significantly reduce the costs of production, a view accepted, I think, by the Minister. The Scottish Council, on the other hand, says that this is most unlikely to happen and that anybody who has studied problems of this sort knows that it will not happen. It is supported in that view by a strong band of economists.
The economists on whom the Minister relies tell us that this scheme will be self-generating and that we shall not need to raise extra taxation to provide the money This is a sophisticated economist's argument, and it may well be right, but half the sophisticated economists on the other side say that it will not happen and that the scheme is most unlikely to generate its own steam.
We are told that it will be a powerful extra incentive to firms to move to the development areas, for firms in the development areas to expand, and for firms which have subsidiaries in development areas to expand their production there. But we are also told by many of the people concerned in those areas that this sort of incentive will be valueless, for reasons which the Scottish Council has developed and to which I shall come in a moment.
On the other side, there is a genuine difficulty about which it is very difficult for the House to make up its mind. That is the argument that if the scheme lasted for five years that would be too short for it to have any effect, and that if it is not found to be the right sort of measure and we have nailed our colours to that mast it will be very difficult to take them off if we decide that it should go on for seven years, as was suggested by the Minister, or perhaps 10 years or some other period.
I have not yet seen a single economist on either side who has said that the scheme is good in that it is connected with the Selective Employment Tax. Those against R.E.P. have unanimously said that it perpetuates the worst evils of S.E.T. Those in favour of R.E.P. have remained very silent on the subject.
Lastly, in this particular category of argument, various calculations have been made on the cost per job of R.E.P. to create the jobs that we need in the development areas. The lowest calculation I have seen has been £3,750 and the highest over £10,000 per job. Even if the expenditure is believed to be self-generating, that is very lavish when one thinks in terms of the cost of creating jobs in those areas by the earlier measures, which were supported by both sides when we were in government and by the Government today, and which was running at about £1,000 a job.
The Government's views as expressed by the Minister seem to me a little naive, but not entirely surprising. I shall come to the reasons later. The Minister told us that the reactions he had received were generally favourable. As I said, I have spent the whole weekend reading every Press cutting available on the subject and the reactions there were generally most unfavourable. But the Minister says that he has the support of a large number of his Regional Planning Councils. If he has, those reports should have been made available to the House so that we can see on what basis they are making these judgments.
The Minister did not seem to be entirely honest with the House. That may have been because he was speaking in shorthand, too. I understood him to tell us at the beginning of his speech that the Government had decided to go

ahead, but at the end of his speech he said that he would listen to the opinions of the House as to whether to go ahead or not. I read in my newspapers, which are very often wrong, that the Government have already decided to put this into the Finance Bill, and if that is so they must have drafted a Clause for that purpose. I therefore hope that when the Chancellor winds up the debate he will tell us exactly what the Government's decision is.
I think that paragraph 34 of the Green Paper sums up the problem uppermost in the minds of many of us, which is that this can work only if the R.E.P. is not swallowed up in extra wage increases. The Government must be fair to the House and say whether they are prepared to take the necessary action to see that that does not happen, because there is no question that the temptations will be enormous. If the trade unions which negotiate these matters know that employers are being given a large subsidy for employing labour and for nothing else—not for being more productive or efficient—the pressures to get more wages will be considerable. Do the Government intend to control them? Will they take statutory measures under their Prices and Incomes Bill to see that that does not happen? We should be told.
I hope that the Chancellor will tell us that if the House does not like this measure as it stands there are other methods of helping the areas which are also self-generating. I am not a sufficiently experienced economist to know, but I cannot see that expenditure on increased training, for instance, may not be self-generating in exactly the same sense as it is argued that R.E.P. will be.
We can all understand that the Government are in considerable difficulty. In spite of every promise made to the House and the people, we have had the toughest and longest "squeeze" in post-war history. We know that the National Plan produced by the Government's economists—perhaps the people who are now telling us that we should have this scheme—was dead within a few months of being born. We know that the figures for May this year, at least in Scotland, show a trend that is the worst for the whole of this decade.
We know that the Government's record on what might be called instant new


ideas in economics and taxation have had the most lamentable record in this House. One has only to look at S.E.T. and ideas on prices and incomes and capital gains ideas that were pushed in without proper thought, debated much too shortly in the House and then had to be drastically changed very soon afterwards. We know all about this record, and it is for that reason that I hope that the Chancellor wil make it absolutely clear to the House that if the newspaper reports are correct and he has already decided to put this measure into the Finance Bill in a new Clause, he will give us a firm guarantee that the whole House will have proper time to think about the very difficult problem and discuss it.
I wish to ask the Chancellor two or three questions to which he will perhaps be able to give us the answers by the end of the debate. Does R.E.P. as it stands conflict with the Treaty of Rome if we go into the Common Market? Secondly, is this measure, intended as an incentive for the development areas, in some degree at least to take the place of the I.D.C. policy? I think that it is generally accepted that if we go into the Common Market the I.D.C. policy, at least as we have known it, will cease to exist, because if one refuses somebody the right to expand in London and tells him that he must go to Glasgow, Manchester or somewhere else, he may say, and very likely will, "I shall go to Holland instead."
Will the Chancellor also make clear to the House, because there is reasonable ground for suspicion, that this scheme was not thought out by the Government purely as a simple method of persuading manufacturing industry to hoard labour through next winter? That is what it may well do, and if that is the reason for the scheme the Government had better admit it straight away.
If the Government have statistics for other regions, I hope that they will soon be able to give them to the House. There is really only one part of the United Kingdom—Scotland—which dislikes being called a region, and I agree with it in that. It is the only part of the country that has pretty accurate independent statistics of what is happening there.
I now wish to turn for a minute or two to what the Minister referred to as

the management of industry's views. He was being a little naive. The Confederation of British Industry has asked every region what its individual views are, and only one—the north-east—by the narrowest possible majority did not come out solidly against the scheme. The position is exactly the same with the chambers of commerce.
I do not say that there is any greater certainty that associations of industrialists are right than that the Government are right or that economists are right, but it is a remarkable fact that when industry is offered £100 million extra there is such complete unanimity that industry does not want it in this form. It is a surprising comment to that extent. Of course, there are some industries—we have all had leters from them—which feel that they would benefit from R.E.P. just as there letters from them—which feel that they would not benefit. I have not time to discuss their individual reactions. It is true that the only body which has unanimously backed this form of help is the trade unions, and perhaps it is not unfair to say that that is not least because there is £100 million floating around which may well be available for extra wages.
I should like to look at the main problems of the development areas. As the C.B.I. and the Scottish Council said, the first and most obvious is the problem of training in skill. The most recent survey conducted showed that in the country as a whole out of 200,000 unemployed in the development areas only 33,000 are available for manufacturing industry without training. The figures for Scotland show that only 6,000 are available out of 85,000. No doubt my right hon. Friend the Member for Mitcham (Mr. R. Carr) will develop that theme.
The second problem which is vital is that of expanding and improving communications. I have had a good deal of experience in this from both the political and the industrial side. If we want to bring down the cost of both production and export from most of the development areas, good, quick communication is far more important than the 1 per cent. to 3 per cent. that industry may save by the subsidy on labour. It seems to me, as I am sure it seems to many hon. Members, a little odd that the Government are bringing in this regional employment


premium—I understand that they have decided to do so—which will affect production costs by 1 per cent. to 3 per cent. —one can pick the figure according to the industry—within a matter of days of allowing the Electricity Board to put up the cost of electricity by 10 per cent. I have not the exact amount—no doubt the Chancellor has—by which that will increase production costs, for it will vary from industry to industry; but the two actions by the Government seem a little incongruous.
This type of help is rather blunt, because it does not try to reflect the undoubted differences between one development area and another or within a development area. It is a flat subsidy irrespective of whether the factory is in South Wales, the Highlands or anywhere else. It also perpetuates the discrimination between the service and the manufacturing industries. I was more than a little horrified to read paragraph 48 of the Green Paper. In the middle of that paragraph I read:
It would be difficult to accept that there should be a narrower tax base in the Development Areas".
If the Minister and the Chancellor take that view, I shall profoundly disagree with them. We had a formidable battle with the Treasury trying to kill the sacred cow of equal taxation all over the country, and we beat them over the free depreciation allowance. This paragraph looks as though the Treasury are working their way back and are saying that we cannot have selective taxation which will help development areas. I profoundly disagree with that. As the Chancellor knows, there is a difference between handing out subsidies and insisting that we cannot have different taxation. The Treasury are often quite pleased to hand out a little subsidy here and there, but if he asks them—and I dare say that the Chancellor has—"What about something steady like Is, off the Income Tax for everybody who lives in Scotland?"— which would have some effect—he knows the sort of reaction that he gets.
The third point, which I believe to be entirely wrong in this conception as it stands, is that it will greatly increase the pull of people from the country districts into the big towns. The pattern of manufacturing industry in Scotland, as almost

anywhere else, shows that the vast majority of this industry is inevitably in the big towns. If extra money is available, the pull to industry from agriculture, forestry and fishing will undoubtedly be increased by this policy and not decreased.
In the past, the development areas tried as hard as possible to attract to themselves the newer industries of growth and to replace as far as they could the industries which, if not dying, at least were slowly going out of fashion. With that in mind, I turn for a moment to the problems in Scotland. There we certainly have the best available regional statistics. We also have the Scottish Council, which I believe has a record second to none and which has infinitely longer experience than any of the other regional councils which have been set up in the whole problem of how to attract industry and how to get local authorities to develop. The Scottish Council has far more information than is available to any other outside body, very often including the Board of Trade itself, and I regard its views as important. The Minister who opened the debate did not do himself much justice in saying bluntly that the Scottish Council was entirely in favour of this proposal with one or two minor modifications. I have not time to read the 55 paragraphs but there are one or two extracts which certainly cannot be said to agree with the Minister's statement that they agree with R.E.P. in general, with one or two minor modifications—

Mr. George Lawson: I am concerned that the right hon. Gentleman does not misrepresent the Minister. The Minister did not say that the Council was entirely in favour. It came out in favour with reservations. The important point is that its conclusions were in favour of this method.

Mr. Noble: I do not want to argue about the exact words used. I said that the north-eastern region was unique and the Minister said, "No. The Scottish Council are in favour, but there are reservations". One of the important factors which the Scottish Council has made clear in its report is that the development areas as such are not necessarily uncompetitive as manufacturing bases. I was delighted to hear two or three of the points made recently about the


growth of industry in Scotland, because too often we tend to decry the development areas' contribution, which in many respects is very impressive. The fact remains that though we have a better growth rate than England and a better export performance than England, and though in many other ways the manufacturing industries in Scotland have done extremely well, our emigration is rising very sharply and our male employment is falling very sharply. For that reason, there is certainly every need for something extra to be done.
The Scottish Council has pointed out that in the last seven years two-thirds of the growth in Scotland has been in mechanical, electrical and electronic engineering. This has come mostly from old-established firms, though there have been some new ones which have come in and helped. The point the Council makes—and it is important that the House should realise it—is that every sort of industry, if it is to expand, needs engineers for the maintenance and operation of its machinery, equipment and so on. The Scottish Council tells us—and it knows a great deal about this problem—that there is absolutely no hope whatever of R.E.P. having any significant effect in Scotland unless a very large number of extra people are trained in engineering immediately, because the economy cannot expand while there is this acute shortage of skills in this key industry.
It tells us that a great deal of engineering work is having to be sent South because Scotland has not the engineers to do it. Orders are being turned away, and the demand for skills in engineering is such that the wage rates paid in Scotland today are higher than in any other part of the United Kingdom, except the Midlands. Therefore, the argument that if higher wages were paid in the development areas, the skills would flow back, is not true of Scotland.

Mr. James Davidson: When the right hon. Gentleman talks of skills in relation to higher wage rates in Scotland, is he referring to engineering skills?

Mr. Noble: I am. I hope that I made that clear. If I did not, I am grateful to the hon. Gentleman for mentioning it.
To be fair, the Scottish Council stated that this particular criticism of the

essential need for more training, particularly in engineering skills, was not a criticism of R.E.P. It says that any expansion which is tried in Scotland will need this problem to be solved, too. It is a criticism of the priorities on which the Government have chosen to spend this money. If the Government would put into the Finance Bill a new Clause giving additional help to industry for training people in the new skills and new ways, then this would be the right priority. To put it on the R.E.P. when the Scottish Council and the C.B.I. and the chambers of commerce say it cannot be used because the skills are not there to develop, shows that the Government priorities are wrong.
The Scottish Council also says in paragraphs 25 to 28 of its paper, which hon. Members have had, that the second priority is not the regional employment premium; it is the need to increase investment. It says that this is complementary and not an alternative to increased investment in machinery. It says that there is practically no under-utilised plant in Scotland at the moment and that if there were increased investment in machinery there would be a better chance of using unskilled people to fill up some of the jobs which will undoubtedly be needed. It says that this is as true in the labour-intensive industries as in others.
Apart from those two, the Scottish Council noted one or two other specific faults. If the Chancellor will accept the Scottish Council's views, then we need not dwell very long upon them. However, it made desperately clear in paragraph 34 the effect of the Selective Employment Tax on the tourist industry:
Already much of this growth has been slowed or halted by the exclusion of hotels and services from repayment of the S.E.T.
I am sorry that the Secretary of State has gone, because it was only a fortnight ago when he and the Minister of State were saying that this had not had any effect on the tourist industry. It goes on to say:
There is no logical defence for this.
Perhaps the Chancellor of the Exchequer can help us with that.
Then it says that if manufacturing industries are increased, there is a great deal of service employment which has to move in step with those manufacturing industries. Over 50 per cent. of all the


jobs in Scotland are in the service industries and if we are to get our share, our 2 per cent. down in our unemployment rate, it seems to be crazy that the Chancellor of the Exchequer and the Department of Economic Affairs cannot get together and at least be more selective about some of the service industries which should get help.

Mr. Donald Dewar: I understood the right hon. Gentleman to say that over 50 per cent. of Scottish jobs were in the service industries. Perhaps he would like to look at the recent report of the National Institute of Economic and Social Research, page 27, which gives the figure for Scotland as 46.6 per cent., which is well below the British average.

Mr. Noble: I was quoting the Scottish Council which says that over a million people are employed in service industries, compared with fewer than three-quarters of a million in all manufacturing industries together. If there is some difference of opinion between the Scottish Council and somebody else, they should resolve their differences outside.

Mr. Dewar: The right hon. Gentleman has missed out some jobs, agriculture, mining, for example.

Mr. Noble: They may have taken slightly different bases of comparison. I was quoting what the Scottish Council had said. The Scottish Council makes it abundantly clear that it regards the exclusion of Edinburgh and the Port of Leith as being total and absolute folly if we are to get that part of Scotland moving.
When listening to hon. Members arguing, as the Minister did, the tremendous advantages which were to come out of the regional employment premium, I found it difficult to see where all the money was to come from. There is no doubt that industry needs a good deal of money for retraining. Nobody denies this. It is true that industry needs to invest a great deal more money, even with the Chancellor's 45 per cent., in new equipment. It has also to cover its existing commitments—dividends, wages and so on—and, with prices rising very steeply, profits in almost every industry are being squeezed. Yet the Gov-

ernment say, "Here is a small subsidy for you on your wage bill. Out of this small subsidy you have to reduce costs, you have to do a great deal of training, and you have to meet all the other needs of cash flow to expand your industry; so we will give you 45 per cent." But there is another 55 per cent. to come from somewhere.
All this in some extraordinary way is smoothed way, and I have no doubt the Chancellor will tell us, "I have other shots in my locker". He may well have, but we are asked to decide whether this is a good policy and whether we are to support the Government in bringing it in without knowing how industry is to get the money to do the things which it has to do if these jobs are to be created. The Chancellor of the Exchequer has to be a good deal more honest with the House if he is to persuade us that he has the shots in his locker which will meet the gaps in the R.E.P. scheme.
The economists are certainly divided. I am sure that for every economist in favour, the Chancellor and I could each find one against, and that is not an unusual situation. Industry and commerce are totally against it. The Scottish Council says that the Government have their priorities wrong, and only the Trades Union Congress is solidly in favour of it.
The Government have told us that we must not be too worried and that they cannot do everything at once. I believe that this is their own fault. They deliberately moved away from the system of growth areas to the system of development areas, thereby enormously increasing the areas to be covered by any special help of this sort, and there is no doubt that the money available will not go far enough for these new development areas in view of the many other things which the Government would like to do.
I believe that this is another attempt at instant government, an attempt, which may be partially successful, to get people to hoard labour through the following winter months, but it is in training and in investment and communications, as the Scottish Council thinks, that the major break-through will have to come. There is nothing in this scheme to make industry more competitive or more efficient. There is nothing to encourage technology or automation.
As many hon. Members did, I read The Times today. The Times has been one of the few protagonists of R.E.P. and in its leader in the business section it says today:
What is on trial is the collective reluctance or inability of the Government to restore the competitiveness of the British economy …".
There is nothing in R.E.P. to do that. Just below that leader, in what might be called the gossip column—and I am sure that The Times has very close relations with all the Whitehall Ministries—it says that the D.E.A. was very much in favour of R.E.P., the Board of Trade against it to a man, and some of the Treasury in favour and some against. If that is true, then even among the Government's own economics experts there is no unanimity about what ought to be done.
Everything in the scheme presented in the Green Paper perpetuates the worst faults of the Selective Employment Tax and if the Government insist on introducing it in this form and adding it to the Finance Bill, as we are told in the newspapers that they have already decided to do, they will not only be throwing away the considerable merit which they rightly earned for saying that they were producing the scheme for people to consider and discuss so that it could be seen how best to use it, but they will have decided to introduce it although the great majority are people who know what will happen are against it.

The Chancellor of the Exchequer (Mr. James Callaghan): The right hon. Gentleman has very properly spent the whole of his speech discussing the serious views of those who are qualified to have an opinion about this matter. Before he concludes his speech, will he say whether the Conservative Party believes that this measure should be introduced?

Mr. Noble: I can give the right hon. Gentleman the answer to that in one word—no. If the First Secretary, who told us so much about what the regional councils had advised him to do, had made any attempt to publish their views, or to say how they were arrived at and by whom, that might have been a good deal more intersting. My answer to the right hon. Gentleman is, "In this form, no".

Mr. Callaghan: If the right hon. Gentleman would not introduce this

scheme, what other measures would he take in order to reduce the differences of the levels of unemployment of the southeast area, the Midlands and London and the rest of the country? All the things which he has mentioned this afternoon—communications, training, investment and so on—are not alternatives to what is being done, but are in addition to what is being done.

Mr. Noble: The right hon. Gentleman obviously wants me to go no speaking for another hour and a half, and I have no intention of doing that. It is perfectly fair for him to argue that these are not alternatives, but there are very clear alternatives. The Chancellor could spend the whole of his £100 million on training and that would be self-financing in exactly the same was as this scheme and would have very much better effects.
However, if the Chancellor has decided to bring in a new Clause to the Finance Bill to introduce regional employment premiums, I hope that he will guarantee to the House that we shall have full time to discuss the many aspects and the very wide variations in the different regions which will need very careful thought.

5.36 p.m.

Mr. J. B. Symonds: I shall not say that I will not speak for very long and then speak for three-quarters of an hour, as has already happened this afternoon. I appeal to hon. Members to speak shortly and to allow others a chance to speak. To speak too long is not fair to other back benchers who have important things to say. I hope that that will also be remembered in days to come. This is the best opportunity which I have had of saying it, and I hope that hon. Members will take note of what I have said.
I am glad that a study of regional policies is being undertaken. It is not before time. The regions have been denied their proper place. I shall speak specifically of the northern region and of the hardships which have been suffered there. I know what I am talking about when I speak of what the northern region has gone through. I have memories of the days of 1936 and of years like that and I also remember when a right hon. and learned Gentleman opposite wore a cloth cap and came to Tyne-side and appeared to think that Tyneside


was the only area in the northern region. When he was asked what was to be done about the North, especially Cumberland, he said that he was not in a position to have anything done.
When we of the region pursued the matter, and asked the then President of the Board of Trade, now the Leader of the Opposition, to give us more money to publicise Cumberland so as to attract industry to the area, we were turned down flat. Today, we have heard the cry from hon. Members opposite about the taxation which industry has to bear, but during all their 13 years of office right hon. Gentlemen opposite never once gave the bringing employment to the North the importance which it deserved.
Speaking on Tyneside last Saturday, my right hon. Friend the Secretary of State for Economic Affairs said that he was prepared to give a Government pledge to support the North-East Development Council with cash grants so that it could bring industry to the North-East. I wish that right hon. and hon. Members, on both sides, when talking about the northern region, would remember that it does not stop at the Pennine Range, but goes right across the country down as far as Millom.
I appeal to my right hon. Friends the Secretary of State for Economic Affairs, the Chancellor of the Exchequer and the President of the Board of Trade. The areas in Cumberland are in the situation in which they need the development outlined in the White Paper. The unemployment figure for Cumberland itself is 4 per cent., which is a large amount. In part of my constituency, the figure is 10·9 per cent., while in other parts of Cumberland it is 8·9 per cent. In the Millom area, it is 4·5 per cent. Is it wrong to give industry an incentive to go there? Of course it is not.
Have our menfolk to work for the smallest average wage in the country? Are we to be cut off and told "Work out your own salvation", as we heard some years ago from a prominent President of the Board of Trade? I appeal to the Ministers concerned to bring this scheme in. Research departments of the Atomic Energy Authority have been placed there. Let them have more research work. When the Government

build factories, as they have done, do not let them stand empty for 12 months or more before they are occupied.
This is the sort of thing which must be done. If this principle in the Green Paper means that more industry will go to development areas, then let it be carried out. But, in Cumberland, towns to reasonable size are about 40 miles apart. One cannot, therefore, claim that putting up an advance factory will benefit a town 40 miles away with 4 per cent. unemployment.
It is on behalf of the people of Cumberland that I speak. They must not be neglected. They must not be cast to one side and told, "You have only 3 per cent. or 4 per cent. unemployment." That does not give them their breakfast tomorrow. It does not stop them from signing on, at the employment exchanges, as they are doing now.
I appeal to members of the Government, whom I have actively supported over the years, to visit Cumberland and see what is happening there and just what industries can be brought there for the benefit not only of the people of Cumberland but of all development areas, whether in Scotland, Lancashire, or the South-West.
Men and women have got to have a good breakfast, a decent home in which to live and earn a good wage. They cannot take the attitude, "I am the boss. How much taxation can I get away with?" If that is to be the thought before men can get jobs, then the Government must say that jobs come first so that men can have an adequate standard of comfort. I say to my right hon. Friends, "Come to Cumberland and see that we are not neglected any more."

5.54 p.m.

Sir Frank Pearson: At your request, Mr. Deputy Speaker, I propose to be very brief and to deal only with a relatively narrow point, which has already been mentioned in the debate—the question of how these proposals will affect what have come to be known as the "grey areas" of Lancashire.
I entirely appreciate the circumstances in which the Government have had to rush forward these measures. Expansion in the economy is flagging and a possible 2¼ per cent. level of unemployment is forecast for next winter. All this must


make the Government extremely concerned about the position in the development areas and look round for measures which will at any rate hold out some hope of attracting new employment and new industries into these areas.
I believe that the proposals in the Green Paper will in no way make industry in the development areas more competitive. Yet in paragraph 41 that appears to be one of the main stated objectives. What they will do, I have- no doubt, is to provide a very strong additional magnet, drawing new industries and new projects into the development areas and away from other industrial areas.
I am all in favour of the development area principle. I have entirely supported all the measure taken up to date. But I am only too well aware that the measures we have already taken to help the development areas have in many cases brought about an imbalance and a distorted industrial development in other areas. I am not saying that there is not sufficient fat in the Midlands area or the South-East to be able to afford some shedding of industry for development elsewhere. But we are not all in the happy position of the Midlands and the South-East.
Many areas in Lancashire have declining industries, mentioned in paragraph 7 as the justification for development areas. The textile and mining industries are in decline. We have an agricultural industry which, under the Government's own National Plan, was to shed no fewer than 100,000 of its employees over a five-year period.
In addition, we have probably a higher average age in our labour force than in any other area in the country. For a number of years, there has been a consistent and steady drift of younger people away from these old industrial areas of East Lancashire. It is these three factors—the drift of younger people, the high average age level of employees and the gradually dwindling industrial population—which give very great cause for concern indeed to the old industrial areas of East Lancashire.
I was sad that the Secretary of State spent 99 per cent. of his speech trying to justify these proposals and only 1 per cent. explaining what the impact is likely to be on areas outside development areas.

I found his programme for approaching this problem extremely unconvincing. What are we to have? Another survey. No practical measures. I cannot help feeling, from certain events that have occurred in the House during recent months, that the Government are hardly aware of the seriousness of the problem in East Lancashire.
I remember the Joint Under-Secretary of State for Economic Affairs answering a recent Adjournment debate which was opened by the hon. Member for Accring-ton (Mr. Arthur Davidson). The Minister dealt for 20 minutes with the problems of North-East Lancashire, but the only solid and atttractive proposal that he was able to put before the House was a suggestion that we might accelerate the smoke clearance scheme.
The other day the President of the Board of Trade announced with great joy that the Government were to set up no fewer than 30 advance factories. I asked him how many of them would help areas which are suffering so much from the decline in the textile and mining industries in East Lancashire. His answer amazed me. He said that one of the factories will be established at St. Helens and that it will give some assistance. Anybody who knew the industrial set-up in East Lancashire would be amazed to hear that a factory established at St. Helens was likely to be of any assistance to the declining industries of East Lancashire.
We had the same kind of thing today. Tremendous reliance was placed on the effectiveness of giving additional I.D.C.s. It is all very well, but what is the good of giving them if people are not applying for them? Also, if people are to be attracted—they are being attracted; it is no good the Minister shaking his head—by excessive assistance for the development areas we shall have stagnation in the old industrial areas.
There is the case of Courtaulds, which is now, I am glad to say, drawing up plans for the establishment for a very large modern textile factory. One might have thought that the factory would be established in the old cotton belt. But it is to be established in the development area at Carlisle. There is also the case of the Nairn-Williamson factory, in the constituency of the hon. Member for Lancaster (Mr. Henig), which closed down


the other day. It is not to be reestablished in the old linoleum town of Lancaster, but will be taken up to Kirkcaldy to get all the benefit of the development grants.
If we are to go ahead with very substantial additional attractions in the development areas, the stagnant areas of North-East Lancashire must be dealt with. It is no good saying that we are to have a study more or less on the basis of there being additional I.D.C.s. We want something more solid than that. There must be a partial grant scheme, or we must be given specific priorities for communications, or we must be given additional assistance to renovate the old towns in the old industrial areas. It is not good enough for the Government to say that they are to have another study made. They must have known that these problems have been boiling up for the past 18 months or two years.

Mr. Heffer: A great deal longer than that, during the 13 years of Tory rule.

Sir Frank Pearson: During those 13 years there was a great deal more stability in such areas than there is today. But I do not wish to become political about this issue. What I wish to do is to point to the seriousness of this problem.
During recent weeks a proposal for a great new town in the Preston-Leyland-Chorley area has been published. It is a magnificent concept. I congratulate the Government on it, and I hope that it comes to fruition. But if it should do, then the draw of this new area, with these additional magnets and attractions, will be killing for the towns of North-East Lancashire. I therefore hope that the question of additional incentives and help will be given very serious consideration, and that in the case that I have tried to put today I shall have the support of all Lancashire Members who sit on the other side of the House.

6.5 p.m.

Mr. Ronald Atkins: I congratulate the Government on the greatly increased help that they are giving to the development areas. When I say "greatly increased" I mean compared with that given by the previous Government. I also congratulate the Government on the good results,

because the disparity between the average unemployment in the country and that in the development areas is much less than it was. I also congratulate them on the new proposals which I am sure will help still further to reduce unemployment.
However, I share the apprehension of some of my constituents in a grey area very nearly contiguous with a development area about the future. We fear that the amount of industry that will be diverted from the South-East to the North-West by the new measures will be greatly limited. We feel that the grey areas will suffer in the sense that nearly all the new industry to be diverted will go to the development areas. We feel that this will be almost entirely at the cost of the grey areas contiguous to development areas and not at the cost of the South-East. Lancashire is in a particularly unfortunate position. It is probably the only grey area squeezed between two development areas. There is the development area of Cumberland and Westmorland in the North and that of Merseyside to the South-West.
We are particularly anxious to get new industry at the moment because of the great decline in unemployment in the coal and the cotton industries. I am particularly concerned about the cotton industry where many thousands of textile workers are at the moment unemployed. We fear that many more decisions will be made like the one made by Courtaulds. Cour-taulds has decided to build a very large new textile factory in Carlisle, where, of course, the employment is needed, but it does not seem to us to be sensible to prevent Courtaulds building new factories in the old-established textile areas where there are many unemployed textile workers. This is just one example of the way in which the new measures might hurt the grey areas.
The President of the Board of Trade last week referred to the empty cotton mills of Lancashire as an industrial advantage. Some of them, it is true, are well built and might be used, but I wish he would look at some of them and then he would realise that they are an industrial disadvantage second only to the spoil heaps. The Government would be doing Lancashire a great service if they levelled out the old mills with the spoil heaps and the empty canals. There is so much


dereliction in Lancashire that it must be a strong positive disadvantage. If the empty cotton mills were an industrial attraction, one wonders why they have been empty for so long. It is not only that the cotton mills are unattractive; they are hemmed in with dreary terraced houses.
The cotton towns require very special assistance in view of the large pockets of unemployment among textile workers, which are not, however, large enough throughout the area to qualify them as development areas. The problem is still serious. I should like the Government to treat empty cotton factory sites as development areas for the purpose of attractiving new textile industry. There is every reason for this to be done as the cotton labour is there. Much of it cannot be used on other industries.
A large number of unemployed textile workers over 50 years of age are not suitable for, or will not submit to, industrial retraining. It is obviously necessary that new textile industry should be brought to these cotton and textile areas. Very little research seems to have been done on the causes of the drift of industry to the South-East. If such research has been done, the Government do not seem to have taken any notice of it. It is true that they have promised to look further into the matter in future, but they could get some quick answers from industry at very short notice. The could send out questionnaires to some industrialists, and they might even consider referring the matter to some Government Departments.
Many of us still want to know why it has been decided that the new administration of the steel industry shall be in London and not in Sheffield or Middlesbrough, or even in Scotland. We sometimes feel that the Government have not learned the lesson of regional devolution. There are many Departments which do not seem to have learned that lesson, and this applies particularly to social amenities, to which I will refer later.
If research was carried out, it would show that some of the chief reasons for industry drifting from the South-East are that it is pleasant country and has excellent communications. Communications are more important in the location of industries than they have ever been

as a result of the lessening importance of natural resources.
In addition, the best social amenities will be found in these areas. Various reports on educational amenities and so many other social amenities continually show this to be so. It is important to remember that the grey areas are usually twilight areas, too. We have been told that one reason for their being grey areas is that they are also social twilight areas.
The Government should act to give the North equal educational opportunities. We are still far from having that, as the reports continue to show. Most disappointing to me is that the Ministry of Education does not seem to be aware of the need to act to give the North equal educational opportunities. A case in point was the White Paper dealing with polytechnics. Instead of giving the North superior advantages, they gave ic inferior advantages compared to the South. It is significant that as regards the proportion of population to the number of polytechnics, the worst case in the country was in the North-West, where there is a great need for higher technical education, in association with industrial retraining.
The Government should get ahead right away with removing the scars of the 18th and 19th century industries. Lancashire should not be blamed for having had this industry—it should be thanked, and the country's thanks should be in some material form to this industrial pioneer.
I cannot emphasise too strongly the need for good and rapid communications. Someone said in support of the new town at Stansted, which is within 30 miles of London, that it should go there because the new town was bound to prosper. That could be said about any area within 30 miles of London, because any such area has excellent communications. That position could not be found in many places in the North.
There is a constant effort by British Railways to reduce rail facilities in the North, whether North Lancashire or Yorkshire as well as in Wales or the South-West. We have had closures again and again. One of the most interesting proposals, which has just reached the newspapers, is that to close the commuter service on the new electrified line—and when I say the new electrified line


I mean the proposed electrified line—between Warrington, through Wigan and Preston all the way up to Lancaster and Barrow-in-Furness, and on to the Lake District.
This is remarkaby surprising, and shows that British Railways are not acting in accordance with the Government's regional schemes, as expressed, because this line will go through the new town of Preston, which will be a metropolis requiring a greatly increased commuter service. Yet British Railways go on with closures regardless.
It has already been pointed out that there is a great need for industrial retraining. We must all agree that, although the Government have increased the capacity of the training centres, much needs to be done. Even the First Secretary has said that proposals for immediate grants to the grey areas have been made in many quarters. I can only ask why not? Let us have them soon.
The future prosperity of any region depends not upon small and limited areas, but upon changing the whole image of a large region. We should consider devolution of prosperity to the regions in line with the need to improve the image of the regions as a whole. One thing that I hope that the Government will do is to press ahead with the new town of Preston—Leyland—Chorley. It has been said that this will take industry away from surrounding towns, but I do not think that this is true.
Indeed, nothing could be farther from the truth. The reason the South-East and the Midlands are so prosperous is that prosperity started in the great centre of the London Basin, and affected the towns around. The prosperity was shed on to them. We need such towns in Lancashire and other parts of the country. It need not be Preston, although I naturally have a bias about this. I am sure that the new town development at Preston will be valuable, because it is pointing up the Ribble Valley and will help the areas in that Valley.
I appeal to the Government to go ahead with planning in the regions, to improve the image and to increase the facilities for industry, to improve the communications, the sites and to get everything ready. They must clear up the

dirty, derelict areas, improve educational facilities and other amenities, and then there will be the possibility of permanent prosperity in the regions.

6.20 p.m.

Mr. Stanley R. McMaster: In addressing myself to the Green Paper, I should like to reflect particularly some views of my constituents in Northern Ireland. I speak on behalf of probably one of the most heavily industrialised constituencies in the whole of the United Kingdom, with industrial interests ranging from shipbuilding, aircraft construction, rope works and heavy engineering to many smaller engineering works.
In Northern Ireland, we have experienced probably one of the highest rates of unemployment of any region in the United Kingdom since the war. Therefore, the proposals set out in the Green Paper are, perhaps, of more interest in Northern Ireland than in any other part of the country. I regret very much that in opening the debate the First Secretary did not pay more attention to the problems of Northern Ireland and the way in which they might be affected by the proposals of the Green Paper. We in Northern Ireland welcome the provisions of the Green Paper which relate to Northern Ireland. Nevertheless, because of our peculiar difficulties there, we in Ulster sometimes feel that we are rather neglected in debates on subjects such as this in the House of Commons.
We have experienced problems not only on the lines outlined in the Green Paper, but problems which are, perhaps, more deep-seated. We have seen a rundown in traditional industries, such as the ship-yards, and also in agriculture. We have suffered from the movement from the land to the city. We also have the difficulty of a more rapidly increasing population with a higher birth rate than any other part of the country.
That means that we have 8 per cent. unemployed in spite of the fact that we are now at midsummer, when one would normally expect unemployment to be at a much lower level. That is merely an average figure, because it reflects 7 per cent. of the women on the register and 9 per cent. or more of the men. In other words, about one person in 10 in Northern Ireland is unemployed.
The Government have taken great measures since the war to alleviate unemployment. They have spent considerable sums in efforts to attract new industry to Northern Ireland. They have taken courageous steps in improving the infrastructure in Northern Ireland. We have an ambitious road-building scheme and we have improved our hospitals and schools in a way which is sometimes the envy of our neighbours in Scotland and other parts of the United Kingdom. We have also given grants of up to 45 per cent of their capital cost to firms moving into Northern Ireland and we have provided them with tailor-made factories at low rents.
All those measures, however, have not been sufficient to meet our unemployment problem. As is sometimes said, we have been moving as fast as we can in the direction of regional development only to remain motionless because of the other factors which, at the same time, have operated against us, particularly the rundown in traditional industries like shipbuilding, linen and agriculture.
There was hope that by 1964 we were seeing the end of the problem. Unemployment had dropped from the very high level of 10 or 11 per cent. three years previously to about 7 per cent. and was showing signs of further reduction. Unfortunately, just at that time we ran into another period of deflation and squeeze. That deflation and squeeze hampered and hindered the efforts which we were making to create further employment in Ulster. That is the main basis of our problem in Northern Ireland. Clearly, from the facts which I have tried briefly to summarise, something more is needed. That is why I support the proposals which are set out in the Green Paper.
When my right hon. and learned Friend the Member for Wirral (Mr. Selwyn Lloyd) introduced his payroll tax, during the time of the last Conservative Government, there was considerable argument in the country about the merits of that tax. After a bit of a dogfight, my right hon. and learned Friend agreed to exempt Northern Ireland and it was suggested by economists at the time that one of the best uses of such a payroll tax would be on a selective basis to help development areas. Indeed, I see the proposal of the

Green Paper as an extension of that theory and of those proposals.
One of the main problems which has prevented the development areas from expanding their industries and attracting new industry at a sufficient rate to offset the rundown in their established industries is their remoteness from the market. Industrialists may be attracted by the amenities in Northern Ireland—by the good roads, hospitals and schools, for example—but they must always bear in mind the cost of transporting their raw materials across to Northern Ireland and their finished products away from Northern Ireland. The same applies in Scotland, Wales, the North-East and the South-West. Therefore, if one is to meet this problem of remoteness, one must find a way of offsetting the transport costs which those industries have to suffer.
A direct transport subsidy has some attraction, but after studying the matter I believe that it would be almost impossible to administer. In addition, it would run contrary to the provisions of G.A.T.T. and of those relating to the Treaty of Rome, to which reference has already been made. It is not possible to help the development areas in that way.
If, however, as the First Secretary has suggested, the proposals set out in the Green Paper are not contrary to the provisions of the Treaty of Rome, and if they can be applied even if Britain enters the Common Market, the measures outlined in the Green Paper are desirable for the reasons which I have stated.
It is vital that we should attract growing industry to Northern Ireland, and new industries in particular. As another hon. Member has suggested, it is not sufficient simply to boost the dying industries. It is more important for the country to be in the position of expanding new industries and bringing in industries which, perhaps, have never been in the region before, setting them up in new factories and using the most modern methods, so that they can compete and, we would hope, expand and lead the whole country in increasing their production and finding new export markets. It is simply by using the schemes put forward in the Green Paper that that end can be achieved.
A matter of great concern to myself and to many economists has been the


speed with which the Japanese have managed to build up their industry in the period since the war. One of the great advantages that the Japanese had was that they were starting, as it were, in virgin fields. The history of shipbuilding and of Sony radio can be cited. The Japanese were able to start with a clean sheet, and factories established in our development areas would benefit from some of those advantages.
We are living in a rapidly developing world. It is important that at least in part of our country industry should be given a chance to start with a clean sheet and show that the benefit of the training and skills which we undoubtedly have, coupled with our ingenuity and ability, can produce goods in competition with any other country. I believe that we have this aptitude. Too many people waste too much time denigrating the British workman's ability and initiative.
It is easy for economists in their armchairs to criticise. Indeed, that is their job. I spent some time reading economics and I know that, in this woolly subject, there is nothing better than to criticise. Any proposal can be pulled to pieces, but when one faces real problems, such as those of Belfast, of unemployed people, one cannot afford to be too lightly critical of proposals like this.
One criticism is that if the money were spent on building up the infrastructure this would meet the needs of the development areas, but providing roads, hospitals, schools and other facilities will not attract industry. We have spent a great deal of money on this in Northern Ireland, for which I am glad, and it has indirectly provided employment and been a very good "relief scheme", but industry will not come for this reason alone.
Another criticism relates to the higher wages and profits. Perhaps some of these payments will be reflected in higher wages; I hope so. One of the problems of development areas is keeping the skilled men. If one cannot offer them higher wages, one will not keep them. That is why one should not worry about some of the extra payments being reflected in higher wages, as they will be spent mainly in the area.
Another criticism has been that service industry will not benefit. But higher

wages and profits will go into the service industries in the area and the whole process is a circle. This will lead to an expansion in those industries and further employment, which is the Green Paper's main purpose. It is also suggested that some other industries in the Midlands and the South-East are worried about the effect, but this is a non-sequitur with the other criticisms, as it means that the benefits will be real and will direct industry to the development areas.
I sympathise with the mention of the "grey areas" just outside the development areas, and I hope that these proposals, perhaps to a lesser extent, could be extended to them, particularly if the premium is the higher rate suggested, £2 instead of £1 or £1 10s. This is not a destructive criticism of the principle but a criticism which shows that the proposals will be effective.
There have been other minor criticisms, for example, that of the Scottish Council about the shortage of skilled labour. I hope that the demand for more skilled labour will give rise to more training schemes in development areas and that any Government would attend to the great need for increasing the supply. This is vital, but it is not a substitute for these proposals. First, there has to be industry, and then one trains the skilled men. It is largely purposeless to spend a good deal of taxpayers' money on training large numbers of skilled men where there is no adequate demand for them, which leads to their emigrating.
I speak with some feeling, because of the highly skilled labour of Northern Ireland, instead of becoming what the Minister might like and as was suggested in the National Plan—mobile, moving to where it is needed, in the South-East, for example—has left Northern Ireland and decided to go to America, Australia or elsewhere.
This is a fault of any part of the National Plan based on ideas of mobility of labour as the solution to our problems. It is much better that skilled employment in new industries should be provided in the development areas. Then the skilled men perhaps would not migrate at the present rate from Scotland, the North-East and Northern Ireland. I am referring particularly to the brain drain to the United States and Canada.
These are ambitious and imaginative plans. They are by no means complete and it is not suggested that they are. I believe, with other critics, that their extent is too brief and that an industrialist might not be prepared to set up in an area like Northern Ireland and incur the necessary capital investment if he thinks that he will benefit for only five years. Some industries take two or three years to become established. If would be better if the industrialist knew that these proposals were for at least 10 years and it is right to suggest that they should be. They might be phased-out gradually during the last two or three years, but he should have some longer prospect than the suggested five years.
Other matters, like labour training, general economic expansion, confidence and lower taxes nationally will all add to the incentive to provide work in these new industries. The ideas in the Green Paper, however, are worthy of consideration and acceptance by the House.

6.36 p.m.

Mr. William Hamilton: I agree with a good deal of what the hon. Member for Belfast, East (Mr. McMaster) said. I doubt, however, whether his own Front Bench would agree—certainly not the right hon. Gentleman the Member for Argyll (Mr. Noble), who tried to back his horse both ways, eventually coming down against the Green Paper's proposition for Scotland, which means that the official Conservative spokesman for the Scottish Tory Party is turning his nose up at £40 million to be channelled into Scotland in addition to the assistance given in the last two or three years—

Mr. MacArthur: Quite wrong.

Mr. Hamilton: The right hon. Gentleman was deliberately asked by the Chancellor whether he was against this proposition and he said categorically "No". Subsequently, he qualified it in its present form, but when asked to specify in what ways he would change it he whittered about the Scottish Council's qualifications but made no specific proposals of his own. Nor is it clear to anyone in Scotland what the alternative is. If it be that which they proposed and put into effect in their 13 years of power, the response of the Scottish people will be

the same as it was in the General Elections of 1964 and 1966.
No party has found a complete solution for the problems of regional variations in economic development. Both major parties have employed a combination of sticks and carrots, of fiscal incentives, monetary inducements and even physical incentives in the form of advance factories. But it is interesting that the Conservatives about two or three years ago were violently opposed to the whole principle of building advance factories. I notice that there has been no mention of that in this debate.
Despite all the plans and policies effected by both Governments, the problem still remains intractable, so much so that some have been led to assert that it would be better if we reverted to a complete policy of laissez-faire and let market forces and the laws of supply and demand do what Governments seem incapable of doing. A principal advocate of that doctrine is not on this side but is a Front Bench spokesman for the party opposite. I am referring to the right hon. Member for Wolverhampton, South-West (Mr. Powell). When the right hon. Member for Kinross and West Perthshire (Sir Alec Douglas-Home) was Prime Minister he also took this view. Lord Hinchingbrooke, as he then was, took very much the same view and thought that economic forces alone, without let or hindrance, would solve this problem of regional imbalance.
I do not believe that that view is widely held in the House or the country today. Indeed, there is common agreement that governmental intervention of one kind or another is inevitable and is in some respects desirable, not only on economic but on social and strategic grounds. There may be differences of view between us about the type of assistance or interference—call it what you will—of government and the scope and degree of governmental intervention, but I hope that there are no differences about the principle involved.
Following the example of the hon. Member for Clitheroe (Sir Frank Pearson), and without wishing to be party political about this, it is fair to say that, in the limited period during which the Labour Party has been in Government, we have done more than most previous Governments to tackle this problem of


regional imbalance. One can think of the five batches of advance factories, the tougher I.D.C. policies being applied in the South-East and the Midlands, and the wider scheduling of development areas as opposed to development districts. This led the right hon. Member for Argyll to charge us with spreading the jam too thinly. However, he went on to say that we should include Edinburgh and the Port of Leith. Would not that be spreading the jam even more thinly? Today the development areas cover about one-fifth of the total working population.
Enormous financial assistance has been and is still being given—the 40 per cent. investment grant in the development areas compared with the grant of 20 per cent. in other parts of the country. We have also had the 25 per cent. building grant and grants towards labour training costs. There has been a general attempt to shield the development areas from the worse effects of the credit squeeze. There can be no denying the fact that regional disparities, measured in terms of unemployment rates, have been reduced despite the credit squeeze.

Mr. Bruce-Gardyne: Mr. Bruce-Gardyne rose—

Mr. Hamilton: I know what the hon. Gentleman would say if I gave way. I listened with interest to the speech he made when we were debating the Finance Bill the other day, and I assure him that he is wrong. All objective assessments of the situation indicate that, however undesirable the levels of unemployment in Scotland, the South-West and elsewhere may be, the fact remains that the gap between those regions and the more prosperous areas has been reduced.
At the weekend Cabinet spokesmen, the Chancellor of the Exchequer and the Leader of the House, asserted that now was the time for some steady, cautious reflation. The whole point of the exercise is that the greater part of that reflation must take place in the development areas. This must be done if we are not to have a recurrence of stop-go, the policy from which we suffered for so long since the war. This S.E.T. proposal must be seen in that broad context.
The proposal in the Green Paper is open to criticism, by omission or commission, and it is valid to ask whether a

study in depth has been made of the £100 million which it is proposed to spend. Could not this have been better spent in the provision of housing and in the rest of the infrastructure proposals that have been made? Although I do not know whether such a study has been conducted, I am sure that the Government have acted on the best advice available to them.
The original idea of S.E.T. was criticised because of its crudeness, its arbitrariness. That criticism must now be somewhat watered down, to the extent that the tax is to be refined and made more selective. I want an assurance that we have not heard the last word in this matter. When the original proposal was introduced I welcomed it, despite its crudeness, largely because I believed it capable of an infinite variety of refinements. I want a categorical assurance that this is only the beginning of this tax being refined. I presume that that was what the Chancellor had in mind when he said at the weekend that he had a lot of other shots in his locker. I hope he meant that S.E.T. will continue to be refined, notably with the development areas in view and particularly the exporting industries in those areas.
I did not agree with many of the remarks of the right hon. Member for Argyll, but I do agree that Scotland's export record is extremely good. The facts and figures are quoted in the Report of the Scottish Council, so I need not repeat them. There is no doubt that the Scottish worker, man for man, is producing more than his counterpart in the rest of the United Kingdom. Because an increased volume of exports is the key to our future prosperity and will enable us to extend the social services in the way we want to see them extended and improved, it follows that Scotland, primarily an exporting country, must be given even more encouragement than it has recently been given.
To say that vast problems still remain is not to denigrate or minimise what has already been done. Consider the investment figures for Scotland. In 1960–61 the figure was £110 million. in 1965–66, the last full year, it was £240 million. In house building, the Scottish Council points out that this important part of the infrastructure of the country must receive more investment if the right industries and jobs are to be attracted to


Scotland. However, nearly 53,000 houses were under construction in Scotland at the end of the first quarter of 1967, a figure never before obtained in the history of Scotland. Tenders approved for 1965–66 totalled 62,380, the highest figure for any two years in Scotland's history. The pace of growth in Scotland in recent years has indeed been something of which we can be proud.
When in Opposition my hon. Friends and I used to criticise the use of the phrase, "jobs in the pipeline"—but views change with the geographical situation of the House. The number of I.D.C.s issued in 1965–66 should result in the creation of another 35,000 new jobs, although my right hon. Friend the Secretary of State has a guilty conscience about this.

The Secretary of State for Scotland (Mr. William Ross): Oh, no.

Mr. Hamilton: He used to be more violent about this sort of thing than even I was.
In view of what I have said, any criticism I may level at the proposal which is before us might appear churlish. Thus, if I make any criticisms, they are based not on the wrongness of the proposition but on the fact that it does not go far enough. It is not selective enough. It may not contribute enough, if at all, to the solution of the fundamental problems of Scotland, such as emigration and the provision of adequate training facilities. We on this side are in a much better position to criticise the inadequacies in training facilities than the right hon. Member for Argyll and his colleagues, in view of their record. The same applies to the, provision of housing.
We can talk about alternative ways of using this money and suggest other means by which we can redress the balance between the respective areas and regions. There are, however, other pieces of machinery which the Government are committed to using. It was said in our election manifesto that we would establish State-owned and controlled industries in development areas. Those of us in the development areas feel very strongly about this and insist that the Government very soon make some specific recommendations along these lines or give us very good reasons why it

is not practicable to do so. This is one way in which we could add machinery to that already proposed for development areas.
Another way to help the development areas is to use Government contracts in channelling work and new jobs to development areas. Lastly, have the Government considered making use of differential National Insurance contributions as a weapon for differential development in the development areas?
If I have made criticisms, I hope that they are constructive. They certainly are not criticisms of the principle of the regional employment premium, which I welcome very much.

6.52 p.m.

Mr. James Davidson: My Liberal colleagues and I find ourselves in the not unusual position of being critical of the proposed method but very warmly supporting the objectives of this measure. The objectives are the reduction of unemployment, the reduction of emigration in development areas and the general reduction of the costs element, particularly the labour element, of manufacturing industries in the development areas. We realise that this measure would cut down the labour costs by between 5 and 10 per cent.
Few would criticise these objectives, but although I represent a constituency in a development area with a very high rate of emigration, I feel considerable sympathy for what I call the middle range areas—I do not like the term "grey areas"—such as parts of Yorkshire and Devonshire and the Edinburgh, Leith and Portobello area of Scotland, which are not in the golden triangle but are excluded from Selective Employment Tax premiums and from the proposed regional employment premium.
In our view, the answer to the problems of these areas lies, not in regional employment premiums, but in the abolition of the lethal Selective Employment Tax, which hits vital service industries and misses certain manufacturing industries which are far from essential; an end to the thoroughly time-wasting system of National Insurance stamps; and the institution of a regionally varied social security tax levied on a percentage payroll basis, with possibly two-thirds paid by the employer and one-third paid by the employee, with a minimum of three rates


so as to allow for the widely varied economic conditions of each region of Scotland, England, Wales and Northern Ireland.
May I illustrate the point by referring to my constituency. I have no wish to be parochial, but I know this area best. In my constituency, apart from the basic industries of farming, forestry, fishing, quarrying and tourism and the vitally important service industries, we have several important manufacturing industries. There is, for example, a bacon and meat processing factory. There are four paper mills and two woollen textile mills. There is a creamery and a factory manufacturing a composite building material out of granite.
All those manufacturing industries are, or could be, directly ancillary to the basic industries of the area. That is a point which has been missed. For example, paper is ancillary to pulp and indirectly to forestry. The manufacture of bacon, sausages, pies, tinned cream and milk, and even the better quality wool for the textile industry, are directly ancillary to the local farms. The construction material is directly ancillary to the granite quarrying industry. Even the locomotive works in Inverurie is, in a sense, ancillary to a service industry.
Where does one draw the line between eligible manufacturing industries and non-eligible service industries? Why should the employer of the man who kills pigs in a bacon factory get the regional employment premium while the employer of the man who transports the pigs from the farm to the factory and the employer of the man who breeds and rears them—which, incidentally, is the most skilled occupation of the three—do not qualify for it? They are part of the same industry. Incidentally, bacon factories have not been profitable recently largely because of the inadequate supply of their raw material—the native pig.
The points which the Minister made about import-saving activities are surely answered by that illustration. Import-saving activities are intrinsic in these basic industries which are ancillary to the manufacturing industries in areas such as the one which I represent.
I have certain criticisms. I will not dwell on them because many of the points have been made. I hope that I

will make my criticisms in a constructive spirit. I accept the Minister's arguments for the regional employment premium, but those against it indicate that a much better method could be adopted. There is a considerable incentive to manufacturing industry to employ more people rather than to automate. In this sense, it is pulling directly against the investment incentive. Perhaps the Minister would consider that point.
In certain circumstances, the regional employment premium may well operate to the advantage of, and come as a windfall to, certain inefficient industries. There is no allowance—and this is vitally important to Scotland—for retraining. Not only that, but the shortage of houses and the lack of certain categories of skilled workers in Scotland are much more inhibitive to the expansion of manufacturing industry than the counter measure which the Government propose to introduce. From where are these manufacturing employees to come? The service industries have been sucked dry of their surplus labour. Undoubtedly, these employees will be drawn from other areas equally lacking in skilled labour. This may well start a scarcity wage spiral in the middle range areas.
Has the Minister considered the possible danger to the wage and costs structure when eventually the regional employment premium is discontinued? Is it to continue for five years or longer? Is five years long enough to give the necessary confidence to industries which they are supposed to draw from this measure?
A point which must be taken into account is that many development areas are not ideal for major expansion of manufacturing industry. Once again we have the arbitrary distinction between service industries and manufacturing industries which I have attempted to illustrate. Surely consultative and advisory offices, training and technical colleges, universities, hotels and tourist enterprises and primary industries should be every bit as eligible for a regional employment premium, if such is to be established, as manufacturing industries.
There is no harm in making again a request to the Minister for an assurance that Selective Employment Tax will not be a permanent institution. If it is, its defects will also be perpetuated. Could


it not be used as a transitional arrangement for a value-added tax, which in the long run would probably be a much more appropriate measure? I believe the self-financing forecasting is somewhat optimistic. If it is correct, any scheme which will stimulate economic activity will be equally self-financing even if it covers service industries also.
If the object is to achieve a 2 per cent. increase in employment in Scotland, why exclude the sector which accounts for more than half of the jobs in Scotland? I ask the hon. Member for Aberdeen, South (Mr. Dewar) not to make his point again. I have noted it; obviously there is a discrepancy in the figures. In spite of this, Scotland still exports 18½ per cent of all her manufactures against 15½ per cent. in the whole of the United Kingdom, and they are 14 per cent. more in value per worker. Industrial output is rising twice as fast in Scotland as in the rest of the United Kingdom, but Scotland seems to benefit very little. In the last seven years—I do not apportion blame for this—the total male employment in Scotland has fallen and net emigration continues at an intolerate rate while unemployment is still twice that of the United Kingdom average.
These are some of the reasons why the Liberal Party has advocated a regionally varied payroll tax with no discrimination against service industry. Our ideas have the support of the Association of British Chambers of Commerce, I should like the Minister to take that into account. Such a tax would have notable advantages. We could have a minimum of three rates. It would be adaptable to different economic circumstances in different regions and, if necessary, it could be changed annually. If one region was going ahead rapidly while in another general prosperity was dropping, it would be possible to vary the rates from year to year within the general premium. There would be far less danger of pressure on wages in the middle areas. It would be far more effective in mitigating unemployment in different areas by being tailored for specific conditions.
By reducing the wasteful system of National Insurance stamps and thousands of people every week licking stamps and sticking them on to cards, many hours of time and irritation caused by carrying out such operations could be washed out

entirely. Staff would be released for administering the scheme as a multi-purpose social security tax both to stimulate economic activity and reduce unemployment where necessary and to cover the whole cost of the social security services. A regionally varied payroll tax is an altogether better method of obtaining the admirable objectives of a regional employment premium such as the Government propose. To requote the effect of a sentence already quoted in the debate from the report by the Scottish Council, why would it be difficult to accept that there should be a narrower tax base in the development areas? I should like the Minister to answer that question.

7.5 p.m.

Mr. Alec Jones: It is both a pleasure and a duty to speak in today's debate, since I live in a constituency in a development area in Wales which is urgently in need of assistance such as that outlined in the Green Paper.
Forced unemployment for any length of time has destructive effects on those who experience it, quite apart from its consequences for the economy.
So runs a sentence in the Green Paper. If there is any need to justify the Green Paper, to justify our discussion of it or the proposals it contains, it is found in that sentence, for unemployment is the one disease which is the curse of all development areas. Behind the cold hard figures of unemployment lies a sorry and ugly picture of human hardship and suffering. Rhondda's unemployment of 9 per cent' hides an ugly picture of unemployment which affects not only the unemployed persons themselves but their wives and children. Because I believe the proposals contained in the Green Paper can help to reduce this level of unemployment in the development areas, I welcome them.
In welcoming the Green Paper, however, I am not making any claim that the selective employment premium will be the answer to all the problems in all the regions. It is not a perfect nor a complete tool. I have come to the conclusion that one is unlikely to obtain any form of perfection in this world. To use a phrase which the Chancellor and many hon. and right hon. Members on both sides of the House have used, many more shots will be needed to be fired from the Chancellor's locker before the problems


of the development areas are solved in their entirety.
A feeling exists among many of my colleagues that the proposals in the Green Paper do nothing for the more rural areas of Wales in which there are a relatively small number of people engaged in manufacturing industry. Although in the Rhondda Valley we do not have many rural pursuits, I have the greatest sympathy for this view. I look forward to hearing much more from the Government of their proposals for dealing with this problem. There are proposals vaguely discussed in paragraph 51 of the Green Paper, which says:
The potential of other primarily rural parts of the Development Areas … is being carefully examined by the departments concerned.
That is an admirable target for some of those extra shots that the Chancellor spoke about.
I hope hon. Members will forgive me if I spend some time dealing with some local matters as they affect my constituency. We have in the Rhondda two factories which have been empty for some months. We have two advance factories in the pipeline. Last Friday we heard with great pleasure from the President of the Board of Trade that a third advance factory is to be allocated to Rhondda. Although I fell foul of the conventions of this House on Friday, perhaps I may be allowed to take the opportunity of saying that we in the Rhondda think this extremely good news and that we were very pleased to hear it.
While it is desirable that we should have a planned programme of factory construction, it is equally if not more important and certainly more urgent to have a strongly planned programme for the occupation of those factories so that not only will they be built but they will be occupied and brought into production as soon as possible. Because the selective employment premium can help to bring those factories into active work, I support it. Despite the views expressed to the contrary, I quote the words of the Regional Secretary of the Confederation of British Industry, who said of these proposals:
There is no doubt they will attract new industry to development areas such as Wales.

In the Rhondda there are a number of firms whch are well pleased with the conditions there. They are satisfied with the adaptability of the labour force. They are anxious to make and are planning new expansions and devlopments. A Selective Employment Premium as outlined in the Green Paper would materially assist such firms during the teething troubles of their period of reconstruction and expansion, when the difficulties which they are likely to meet are greatest.
Although I support the concept of a Selective Employment Premium, I ask the Government to consider whether it could be made more selective and hence, from their point of view, provide greater value for money. The very serious imbalance which exists between the levels of unemployment in the development areas and areas outside them is obvious to everyone, otherwise we should not be debating this project today. In addition to this imbalance, there is a very serious imbalance within the development areas themselves.
Such a situation merits either a differential in the amount of premium payable, according to the level of unemployment, or a possible restriction on the size of the area in which the premium is payable. I am advocating that we try to concentrate most of the aid in areas where it is most needed—that is, those black spots with the highest levels of unemployment.
The people of the Rhondda welcome the Green Paper, because we believe that it contains a sincere and practical attempt on the part of the Government to move towards a solution to what would otherwise be an intractable problems. The message I have for the Government from the people of the Rhondda is this: "Implement these proposals. Improve them if you can, but for the sake of our 9 per cent. unemployed act quickly and get on with it".

7.12 p.m.

Mr. Peter Mills: I welcome the opportunity of speaking in this debate, because these proposals will have a considerable effect on the Southwest and also because my constituency will be in a peculiar position, half in a development area and half out. It is one of the rare constituencies which sees both sides of the fence.
I am against these proposals. I am certainly not against the aims. I do not go as far as the South-West C.B.I., which recently described these proposals as
dangerous, ill-advised, and a misuse of the Government function.
I do not think that that is fair. However, I think that these proposals are ill-advised and that any money which is available could be used to better advantage.
I will state my reasons for opposing these proposals. First, they build on to an already unsatisfactory tax— S.E.T. I have never accepted S.E.T. By that I mean that I do not like it. It has done considerable harm to the South-West, which is a service area. Millions of £s have gone out of the South-West into other production areas. Thus S.E.T. has had an adverse effect on the South-West.
Secondly, these proposals fail to take into account one of our basic industries—tourism. It is one of our largest and the one we are most suitable for. These proposals will not help that industry.
Thirdly, these proposals will further increase the anomalies which already exist. This is true of areas just outside a development area. I cannot count the number of times that I have mentioned the problems of small towns and areas outside a development area, particularly those in my constituency—Okehampton and Winkleigh. One has only got to see the effect in those areas to realise how serious the position is. The effect could be multiplied many times as one gets close to a development area. What is happening is a sorry picture. I regret to say that the situation is deteriorating. These proposals will make this type of area and these towns 1,000 times worse. I believe that it would crucify areas such as that which I have mentioned. [HON. MEMBERS: "Why."] I am trying to explain why.
Fourthly, the economic damage which would be done to these areas would be great. Already firms which want to expand close to a development area border are packing up and moving across the border into the development area. The adverse effect on the towns so affected can be seen by everyone. Towns flourish in the development area, yet a mile or two away firms are in serious trouble.
Fifthly, these proposals would not help agriculture, which is one of our major industries, which is a natural industry for the South-West, and which is an industry in which we can do well. The implementation of these proposals would speed up the drift from our farms and villages. Competition for labour would become acute. If we ever join the Common Market—the whole purpose of our doing so as regards agriculture is that we should produce more of our own agricultural needs—we shall need to continue with our present labour force. We do not want to see our workers drifting out of rural areas into towns.
These are formidable reasons which should persuade the Minister to think again. My suggestion—it is one which has been rather laughed at tonight—is that any money which is available would be better spent on the infrastructure of any region. The most valuable expenditure would be any made on the communications. This may be a long-term proposition, but we shall not solve these problems in a year or two. We must look many years ahead. The only way of solving the problems of the South-West is by better communications. If £100 million is available, I estimate that on the basis of the number of people employed in productive industry in the South-West £2 million would come our way. The expenditure of such an amount would do much to improve communications in the South-West.
Greatly improved communications would change the whole character of the South-West. Industry would naturally come to an area where there were better communications. This would help to stop depopulation. The holiday industry would flourish if there were better roads. Better communications would overcome a problem which I foresee will arise when North Sea gas becomes readily available, when the Channel tunnel is built, and when and if we join the Common Market, because all these eventualities will greatly aggravate the situation in the South-West.
What else could be done? I recognise that it is no good merely criticising these proposals. We should continue the excellent help which has been given in the past by grants and by the establishment of advance factories. We welcome the new ones which are coming to the South-West, but we want more. We


must encourage industry to make a move. The Government can help by dealing much more expeditiously with industry's requirements and problems. Many manufacturers have said to me that it is all such a business, so much has to be gone into, there are so many forms, and so on. One recognises that it is necessary to have a thorough check, but I believe that the Board of Trade could help many firms, particularly the smaller ones which are rather frightened of all that is necessary, by making the process much easier for them.
Next, we need more mobility in what we do. For example, in my own constituency areas such as Bideford and Barnstaple will, in a year or two, probably have enough factories and enough help. In such circumstances, when we have dealt with one area, let us move on to the next which still desperately needs it.
The Minister should consider a system for the scaling down of help. The boundaries ought not to be so rigid as they are, very much a matter of black and white. I know the results of this very well in my own constituency, half of which is in a development area and half out. The differences are apparent to all.
I question the accuracy of our unemployment figures. I am sure that a lot is hidden in the returns. Do we know all we should about the permanently unemployed? I am sure that we can have false figures for unemployed. For example, there are the elderly, retired bank managers, insurance managers and others, who come to my area. They are unemployed for a certain time, and, if they are shown as unemployed, the figures give a false picture of the situation in the area. Moreover, the figures do not tell us anything about the drift, the depopulation which is going on, or about the number of school leavers who go away, good material which should be retained in the area. If we are to tackle the problem seriously, we should have a far more accurate picture of what the unemployment figures represent.
We must help ourselves in the development areas. It is not right to leave everything to the Government, although it is up to the Government to create the right climate and give encouragement. It greatly distresses me when, for example,

authorities in a development area do not place orders with firms in the development area. Only the other day, we had a particularly unsatisfactory case. The order for the new Saltash ferry, which could be built by Appledore shipbuilders—the price was lower, and I understand that the time was right—went out of the development area. This is no way to help our own area. In my view, the authority concerned was wrong. I understand that it was influenced by its consultants. I suggest the Cornwall County Council should change its consultants and have someone who is interested in the development area. We should jolly well see to it that, if there are orders going, they are placed within the development area itself, in order to help relieve unemployment.
I hope that the Minister will consider carefully the reasons which I have expressed for my opposition to his proposal. As I have explained, I am not opposed to the aims, but I am opposed to the proposal itself. I want him to think again particularly about its effect on towns and villages which border a development area because it is this business of being either in or out which has a serious effect on such areas.

7.24 p.m.

Mr, Stanley Henig: Sometimes, the economic Departments act rather like conjurers producing rabbits out of a hat, but one of the troubles is that the rabbits which they produce, if I may so put it, tend to be justified on all sorts of criteria not all of which, to put it mildly, seem equally valid. I hope that, after listening to the debate, the Government's economic spokesmen will do what they said they would at the beginning, that is, consider carefully the arguments which are put and adopt a flexible approach to them. A serious case can be made against their whole proposal.
Though saying that, I wish to make clear that, for my part, I do not object to paramount consideration being given to the development areas. All these areas have had a long history of terrible problems of unemployment, stagnation and the rest, and it would be wrong if a Socialist Government did not now give them top priority. But, in doing that, any Government have an obligation to make sure that the effect of what they


are doing is not spread unequally throughout the rest of the country.
Before coming to the problem which concerns me most, the problem of the grey areas, I wish to raise one or two preliminary points. First, the question of cost. I should like my right hon. Friend the Chancellor of the Exchequer to tell us exactly what he expects the cost to be, in round terms, of each job which is to be created in the development areas. We have had from the First Secretary of State the figure of 100,000 jobs likely to be created. I should have thought that that was rather optimistic—for instance, in 1966 there were only 119,000 unemployed in the development areas altogether—but I may have misunderstood something there. However, it still seems to me that the cost over seven years will be about £7,000 per job. Is that figure right?
If that figure is correct, are we spending the money, the £100 million a year for seven years, in the best way? Is there a danger—this is what I fear—that by not only giving premiums to employers to create new jobs but also by giving them to employers for their existing employees we may help to swell profits? That is a distinct possibility.

Mr. R. B. Cant: Will my hon. Friend make clear to the Chancellor of the Exchequer that he wants to know not only the financial cost but the opportunity cost of providing these extra jobs?

Mr. Henig: I am sure that, by his intervention, my hon. Friend has made the point clear to my right hon. Friend the Chancellor of the Exchequer.
Next, the question of efficiency. I cannot see how the giving of a simple subsidy on the employment of labour will itself help to create the efficiency which is the sine qua nonfor increased exports. The First Secretary of State said today that he did not think that paying employers £2 per employee per week would make them employ labour which they did not really want. Put as starkly as that, yes, but let us consider the point further. Last year, when the Selective Employment Tax was introduced, we were told that the effect of the tax— 25s. per man and 12s. 6d. per woman—on the service industries would be to make them release labour which they did

not want. If the effect works in that way in that case, why does not a similar effect work the other way when the sum involved, in this case £2, is rather larger? The point here is that we are not considering this matter in absolute terms; we are considering it at the margin. If there is a labour subsidy of that kind, it must at the margin induce employers to hold on to labour which they otherwise might not need.
Another argument which I cannot understand is this. If our investment allowance policy amounts to a kind of subsidy to capital-intensive industries, I do not see how, by giving this new subsidy and thus helping labour-intensive industries, we restore the balance. The two seem to cancel one another out. I should be glad to have my right hon. Friend's comments on that.
It has been suggested that one of the repercussions of the regional employment premium will be to lead to some sort of regional devaluation, with prices falling. I should like to know a little more about the mechanism of this. Somewhat conflictingly, it has also been said from the Front Bench that it was not very likely to lead to a rise in wages. If an employer is receiving a certain sum of money for all employees, and if he is hesitating before changing his prices, the trade unions, which do not always do these things nationally—least of all in Scotland, perhaps, where the bargaining is often done on a separate Scottish basis—might, quite reasonably from many points of view, ask for higher wages. Thus the employment premium will lead to higher wages rather than lower prices.
If we are helping these areas, I do not see why we should concentrate the help on manufacturing industries, when in at least some of the development regions—certainly in the Highlands of Scotland and in the Lake District—the most important industry to be developed is tourism. That industry has been adversely affected by the S.E.T. and will not be helped by the regional employment premium. In terms of long-run economic development of the country, I cannot see the point of trying to re-industrialise all parts, regardless of whether manufacturing industry is the most suitable thing for them.
I want to move on now to the problems of the grey areas. Representing the Lancaster constituency I feel most strongly about them, and I hope that I shall be forgiven if I take one or two minutes to explain the problems we have had in Lancaster, and how the proposed R.E.P. is likely to affect us. We in Lancaster are not typical of Lancashire, in that we have old-fashioned businesses which must gradually adapt themselves to new and changing circumstances. One of the most normal ways in which they adapt is to merge into larger groups, and at this moment only one of the large employers of labour in Lancaster is a Lancaster-controlled firm. All the others are in wider groups, and that is very important. The second thing is that Lancaster is near Morecambe, and Morecambe has a high rate of unemployment already. Lancaster may very soon acquire one, and that again is a reason for looking specially at this area.
The particular industrial problem of Nairn-Williamson was recently referred to in the House. Not always having been run in the most efficient way in the past two or three years, it sought to rationalise. In seeking to do so, the firm had the option of expanding in Lancaster and contracting in Kirkcaldy or vice versa. Kirkcaldy is in a development area, and given that the Government were going to help the firm at all, and faced with that choice, Nairn-Williamson naturally decided to expand in Kirkcaldy. Good luck to Kirkcaldy. I am glad that it will have more employment, but Nairn-Williamson will lay off 1,500 men in Lancaster which will bring unemployment up to 7 per cent.
The Board of Trade has been mentioned today. When these points were put to it, the Department said, "Other jobs will be created. We can help with industrial development certificates". It is true that it could help with industrial development certificates. Only one thing worries me—it can only help with them if firms apply to develop in the area in the first place. There is good reason for suggesting that firms may very well not do that. If it is a choice of going to, say, Birmingham or a development area in the Highlands of Scotland, Birmingham has many advantages. The Highlands of Scotland have the advantages of invest-

ment allowances, and, shortly, will perhaps have the advantage of the R.E.P. Those are powerful factors.
Therefore, a balance can be struck and perhaps Birmingham loses something to the development areas. I suspect that Birmingham may be able to afford it. But what about Lancaster and North Lancashire in general? What natural advantages do those areas have? As a representative of them, I should like to say that we have lots of natural advantages, but I should not be telling the truth. I do not think that we have those advantages. If we have, I should like somebody to tell me what they are. What will happen is that the brunt of supporting the development areas will be borne by the grey areas. Paragraph 46 of the Green Paper says:
The potential effects on industry generally outside the Development Areas should not be exaggerated.
It adds that the unemployment could be reduced in 20 per cent. of the country and the load would be spread over the remaining 80 per cent. But the whole point is that the load will not be spread equally over the remaining 80 per cent. The brunt will be borne by those areas which have the least advantages.
The Government may very well have hit upon a possible idea for industrial development, despite all those drawbacks. But what we particularly want to see in our areas is the refinement of the idea. Given the conflicting industrial and economic needs of various parts of the country, it can no longer match realities to put the development areas on the one hand and all the rest of the country on the other. How can one say that the West Midlands and the South-East have the same kind of economic and industrial problems, which shall be treated in the same kind of way, as the North-West, whose traditional industries—particularly cotton and to some extent coal—have both been declining, and which face the kind of problems I have indicated that we in Lancaster particularly face?
What we want to see is some form of gradation, but also something else. Like others, I am not at all happy with the piecemeal manner in which the Government have approached the problem of development. What sort of country do we want to see? Do we want to see


industrial development in the middle of the Lake District, for example; tourism in the Highlands moved further south to the traditional cotton areas of Lancashire? I do not know. Do the Government know? What is the master plan behind all these things?
Are we trying to move manufacturing industry into these areas? Have we any ideas about migration patterns from one part of the country to the other for the future? It seems to me more and more that the R.E.P. is a sort of reflex device to meet a particular situation, but not fully thought out in a way which will avoid creating other problems.
What many of us in Lancashire would like the Government to do is as follows—and I hope that this point will be passed on to my right hon. Friend for him to deal with when he winds up. We understand that the Government feel that they need to help development areas. One has a feeling that the general debate today will replace the Second Reading debate and a number of Amendments will be put down to the Finance Bill. If that is the case, so be it. But if the proposal has now reached the stage where the Government must go ahead without essentially modifying it, it is possible to do other things.
It would be possible for preliminary action to be taken immediately, without waiting, to give some kind of assistance to the grey areas. It might be a redefinition of existing boundaries of development areas, or, better still, a look at the problem of gradation which I have already mentioned. But, either way, I hope that before the evening is out we in those areas will have a pledge from the Government. I ask that because consistently over the past few months I have returned to my constituency and heard tales of woe, having industrialists and others tell me, "You cannot expect us to develop here. The arguments for going elsewhere are so great." Hearing the concern about the new R.E.P., I always told them that the Government were considering these problems, and that they could be quite certain that the Government would look after the problems and had an economic policy to deal with them.
The situation has now been reached, with this debate and the announcement that the Government are going ahead

with R.E.P., where I have doubts whether my word will go far enough in saying these things. If the Government are not able to announce immediately policies to help the grey areas, we should like a pledge from them that as soon as they have got through this piece of legislation and put the R.E.P. into practice their next and chief priority will be to find ways and means of ensuring that the burden of helping the development areas does not fall unequally, and particularly heavily on those remaining areas which are least able to sustain the burden.

7.40 p.m.

Mr. Ian MacArthur: The hon. Member for Lancaster (Mr. Henig) regarded the Green Paper as a rabbit which was rather hard to justify. I agree with a great deal of what he said. Perhaps he would agree with me in feeling that the rabbit should be put smartly back into the hat from which it was drawn just before the Budget, partly, I think, as a diversionary activity.
I was disappointed with the opening speech today of the First Secretary of State and Secretary of State for Economic Affairs. When the right hon. Gentleman made his statement on 5th April, I welcomed the fact that there were to be discussions with representative groups throughout the country and he assured us that there would be full discussion so that an informed House would be able to debate the proposal later on. His speech today was a severe disappointment in view of that statement. Certainly, opinions have been sought and tendered to the Government. Surely, however, the right hon. Gentleman should have gone into much more detail than he did about the nature of some of that information, particularly that given privately. We would have a better informed House later on if he could have given an undertaking that the evidence given to the Government would be published, so that we could be truly fully informed.
Secondly, the modifications he proposed today were insufficient. I am glad that he has decided to extend the proposal for the premium from five to seven years. That improves it in a direction in which the Scottish Council wants it to go. But what else was there? Nothing.


That was the only modification he proposed today. If that is all he can produce after these two months of consultation, in the face of all the opposition and constructive criticism that there has been, the whole process of consultation has been little more than a sham.
I accept that something of this kind has a rôle to play in the development areas. It is obvious that £100 million has a rôle to play. I am not sure, however, that this is the form in which additional help should be directed to the development areas. If the midway figure were to be the ultimate one, I understand that the £100 million would break down into about £40 million for the Scottish Development Area and about £60 million for the other areas. No doubt the Government will try and present this as a gift to development areas from a benevolent Government, but the fact is that it is simply a return of part of a tax which should never have been levied on development areas in the first place.
Even if this £100 million comes in the guise of a gift, it is never attractive for anyone to look a gift horse too closely in the mouth. As the right hon. Gentleman knows, those concerned with industry in Scotland who have studied the proposal carefully find that there is a good deal in the horse's mouth which disturbs them. I do not say that this raises the question of the integrity of the horse trader, but it casts doubt upon the commercial and economic competence of the Government.
The aim which the right hon. Gentleman set out at the beginning of the debate and which is made clear throughout the Green Paper is one that we all accept—to reduce, in time, the disparity between unemployment levels in the development areas and those in the rest of the country. As he was realistic enough to recognise, this is still a very big problem and one which has been returned to time and again during the debate, notably by the hon. Member for Fife, West (Mr. William Hamilton).
The hon. Member for Fife, West with others, made the strange claim that the position is better now than it ever was. I call his attention to the fact that, if one considers the two comparable years 1961–62 and 1966–67, one finds that the proportionate balance between the development areas and the rest of the

country has worsened against the development areas. It has not improved. I do not want to make claims and counterclaims in this connection, but it is right that the record should be straight.
Unemployment in development areas is still, despite all that has been done by successive Governments, running at about twice the average rate for the country. The Government have been precipitated into taking this action by fear of what is lying ahead for them next winter. The unemployment prospects are grim, as the Government must realise, and this is also underlined by the very disturbing trend in the unemployment figures in Scotland recently. There, the fall in unemployment between January and May has been very small indeed—only 6·8 per cent.—by far the lowest fall over these months at any time in this decade.
This suggests that the hard core of unemployment is very much higher than we could possibly want it to be. Alas, it is from that base that we shall see it build up to the unemployment peak which I fear will be reached this coming winter.
If this proposal were to help us cut unemployment in Scotland and the other development areas, or at least ease it, I should welcome it, but I fear that it is designed to meet a situation which no longer exists or has at least changed considerably. This is a point to which the Scottish Council returned again and again in the paper which the right hon. Gentleman referred to briefly. If one studies that paper and looks at the trend of unemployment in Scotland and the economic scene generally there, one must ask oneself two questions before determining what to do about this new proposal. First, what is the nature of unemployment in Scotland and, secondly, what is the direction that it is proposed the premium should take?
The first point which arises is that the nature of unemployment in Scotland has changed. It is still double the United Kingdom rate despite the shelter that the Government promised to Scotland last year. An alarmingly high proportion of the unemployment figure in Scotland consists of unskilled people. There was some discussion earlier in the debate about how many skilled unemployed there were. I understood the right hon. Gentleman to say that there were 2·6 skilled men for every skilled vacancy in Scotland and


Wales combined. I do not question that, but I recognise the reality which industrialists find confronting them—that it is becoming harder and harder, and in some parts of Scotland impossible, to find the skilled labour on which the expansion of growth industry depends.
If we want to see long-term industrial development in Scotland, we obviously want to see an even more rapid development in the growth industries than there has been over the last years. This will only happen if skilled labour is either available or in prospect. But I understand that not a sufficient number of skilled men are available and certainly the prospect of having a sufficient number in future is dim. So I question whether the climate of present unemployment is appropriate for this kind of remedy.
This is where I believe the Green Paper falls short. There have been references to a comment in the Scottish Council's Paper calling attention to the fact that weekly earnings in engineering are higher in Scotland than in London and the South-East, thus emphasising that, in that industry at least, the shortages there used to be in Scotland—shortages of employment—have eased. But this picture is not quite correct. I do not dispute the general trend of the comment, but I think the correct position is that weekly earnings in engineering in Scotland are still somewhat lower than in London and the South-East, certainly if one consults the latest Ministry of Labour Gazette. The figure the Council perhaps had in mind was that of last October for electrical and engineering trades combined. But whichever figure one takes, the position in Scotland is not one of a large pool of available skilled labour.
The Scottish Council Report goes on to call attention to the fact that in a recent survey the Ministry of Labour reckoned that less than 6,000 people in the whole of Scotland were immediately available for work in industry without retraining or moving house. I found that a staggering comment. I had not previously seen the figure. It underlines, if any further underlining were needed, that the unemployment pattern in Scotland is different from the pattern that existed some years back. Has the change in this pattern been taken note of by the Government? I doubt it, because there is not

one reference to shortage of labour or to the changing pattern of unemployment throughout the whole of the Green Paper.
Clearly, we are not going to get the development and the growth we need unless skill is available or the prospect of skill is in view. However, skill is not the only consideration. There is the physical availablity of labour to consider, and we know that housing is of paramount importance. The right hon. Gentleman the Secretary of State for Scotland, in a speech in Dundee not long ago, called attention to the critical nature of the housing problem in Scotland as a factor in emigration. He said then, and I agree, that one of the main reasons for so many young people emigrating from Scotland—a figure going up year by year under this Government—is that they are unable to get houses. One of the reasons why labour is not available where it is needed is because of the solidification of the Scottish housing scene.
Industrial growth depends on many factors other than the ones which the Green Paper attempts to tackle. That raises the question about the direction of the R.E.P. proposal which, after all, is a form of wages subsidy. I fear that if we were to go ahead with this proposal as it stands we might find ourselves perpetuating the need for subsidy of this kind and not getting at the root of the problem which has to be tackled if we are to see growth of self-generating employment in Scotland in the long term. The R.E.P. proposal will do nothing to help industrial investment. Yet it is industrial investment which, above all, Scotland needs, and the Government know the depressing outlook there is in terms of private investment. The proposal will not help that in the least.
There is a crying need for more retraining facilities. The righ hon. Gentleman made an obeisance to that need in his speech, but he had no proposal to make to the House. There are no new policies. There is no new investment in retraining and, although the right hon. Gentleman made claim that there are so many retraining centres, it would be interesting if, in the Chancellor's reply, we could be told how many places there are in the development areas and how this relates to the retraining needs which exist in those areas.
The housing need, which I referred to a moment ago, is one of the critical needs in Scotland to stem emigration and help to maintain the provision of labour, but nothing in housing would be affected by this proposal.
There is a need for better communications, which my right hon. Friend the Member for Argyll (Mr. Noble) and other hon. Gentleman have referred to. These would not be affected. There is a need for better environmental services generally, but these would not be affected. One point which has not been raised and which would speed development in Scotland more than many other measures is a movement of the centres of decision into the development areas so that more one-the-spot decisions could be taken.
I accept the point made by the Chancellor earlier that all these are separate issues, but these are the issues that really matter; these are the things that we have to concentrate on if we want to see growth and speedier development in Scotland.
We have been told during this debate that R.E.P. should be regarded as separate from S.E.T., but I submit that the two are inextricably linked. Before the Government go ahead with this scheme I hope they will look again at the whole structure of the Selective Employment Tax and will bear in mind that the impact of S.E.T. on the service industries and on the remoter part of the development areas will be all the greater if the R.E.P. proposal goes through as it is, because the differentials will be made that much wider. There is a need to end the absurd distinction which the Government draw between manufacturing industries and service industries. In the first place, it is a very questionable philosophy and, secondly, there is the practical point that, whatever the hon. Member for Aberdeen, South (Mr. Dewar) may say, rather more than half the people who work in Scotland are employed in the service industries.

Mr. Dewar: Would the hon. Member not agree that this would be a valid point if there was a much larger proportion than in Britain. The proportion in the service industries in Scotland is less than in Britain as a whole, which com-

pletely destroys the validity of his argument.

Mr. MacArthur: I question what the hon. Gentleman says. The hon. Gentleman was quoting the wrong figures earlier. In the White Paper on Scottish economy all the figures are laid down. Excluding agriculture, employment in the service industries far exceeds that of other industries in Scotland.

Mr. Dewar: This is what the hon. Gentleman says.

Mr. MacArthur: This is what was said by the Government Front Bench. If the hon. Gentleman wants to quarrel with his own Front Bench, let him do it; it is not an argument for me.
The practical point is that more than half the people at work in Scotland work in the service industries. If the hon. Gentleman the Member for Aberdeen, South, will consult the Secretary of State for Scotland and the White Paper he will see that just over a year ago, when the White Paper on the development of Scottish economy was published, the Government had in prospect an increase in jobs in Scotland by 1970 of 50,000 in manufacturing industries and 80,000 in the service industries, including the construction industry. That was before Selective Employment Tax came and knocked firmly on the head estimates of that kind. That is the way the right hon. Gentleman the Secretary of State was thinking just over a year ago. That shows yet again the importance of the service industries in Scotland. It is there that the major part of our employment growth will lie, and they are the industries which are hit hard over the head by the Selective Employment Tax as it stands.
In the Green Paper there is a reference to the difficulty of adjusting the Selective Employment Tax in the development areas, although the Chancellor of the Exchequer wrote to me last July saying that the workings of the tax would be kept under review so that it could be refined for the development areas in due course, if necessary. The Green Paper, however, states in paragraph 48:
It would be difficult to accept that there should be a narrower tax base in the development areas. The incidence of the tax on the development areas taken together is much the same as on the country as a whole …


That may be so, but the incidence of the tax on the remoter parts of the development areas is very much greater than it is in this country as a whole. This is why the tax makes such utter nonsense from every point of view when applied to the Highlands and Islands of Scotland, to the remoter parts of Aberdeenshire, to the remoter parts of Perthshire and to those parts of Scotland—and there are very many—which depend almost exclusively on the service industries for their employment and growth. I remind the Government that if the present proposal goes through, and succeeds, even with the one or two modifications which have been hinted at, the impact of Selective Employment Tax on these areas will be that much greater, because the magnetic attraction of the manufacturing industries within the development areas would be that much greater.
I ask the right hon. Gentleman to relate the R.E.P. proposals to the S.E.T. more than he has done. I would be very much obliged to him if he would study the possibility of applying at least some part of this £100 million to the easement of certain industries which are gravely hit by the Selective Employment Tax, the growth industries, industries which could provide a much greater part of the growing employment which is needed in Scotland. The obvious industry to quote is tourism. The tourist industry meets all the requirements which the First Secretary set out. It provides employment in some of the hardest hit parts of the development areas, the Highlands and Islands for example, and it provides much growth prospect in those areas as well.
The right hon. Gentleman is naturally anxious that the R.E.P. proposals should not promote general inflation. Some particular aid to the tourist industry through the easement of S.E.T. would certainly not promote general inflation, but it would help to reflate the local economy because of the local ramifications of the tourist industry. It would have a localised effect, which is precisely what the right hon. Gentleman is striving for.
The Government are also looking for the development of proposals which would make no demands on our balance of payments position. That would certainly be the case if tourism were helped

in this way. Indeed, the balance of payments position would be eased partly from the diversion of people from holidays abroad to holidaying at home and partly by the attractions which a better tourist industry could provide to the growing number of foreign visitors bringing foreign exchange with them.
In short, I welcome the proposal, as would anyone else, that £100 million should be put into the development areas. I do not welcome the proposal that it should be done by means of this half-baked R.E.P. idea, which is simply a partial reimbursement of tax which should never have been introduced in the first place. I do not welcome either the shape or direction of the present proposals. There are many other things in the development areas to which the Government should give higher priority if they are genuine in their wish to improve employment prospects and to speed development.

8.3 p.m.

Dr. John Dunwoody: I wish to speak from the point of view of the South-West Development Area where one can see an extension, a heightening, of the problems being faced to a greater or lesser extent in all the development areas of Great Britain. In particular, in the far South-West, in Cornwall and the north of Devon, we have the problem of constant and high unemployment, high unemployment which in a society like ours is a crime. It is wrong that men who are able, skilled and capable should be lounging around the streets or sitting idly at home when they want to be working and when the country needs them to be working. One can take it further than the individual and consider the community which all too easily becomes demoralised when there are high rates of unemployment over a long period.
In the far South-West. particularly in Cornwall, we have the injustice of having the lowest wage rates in England combined with some of the highest costs. The prices which we pay for gas, electricity, coal, petrol and many other items are higher than the prices paid elsewhere in the land, and yet the average wage rates are the lowest in the United Kingdom. Combined with this we have antiquated social conditions, Victorian housing, slum schools, inadequate communications, a


whole environment which drives away so many of our more able young people.
I want to underline some of the special problems being faced in this development area. These special problems are different from those being faced in the other four development areas, in Scotland, Wales, the north of England and Merseyside. I also want to mention some of our problems with the Selective Employment Tax. I have been one of those who have supported S.E.T.— I did so when it was first introduced—although I have been critical of certain aspects, particularly the rigidity and inflexibility of this form of taxation. For that reason I have asked for the introduction of an element of selectivity. Believing that we need an element of selectivity in this tax mechanism to favour development areas, I welcome the R.E.P. proposals, although with some misgivings and provisos and some suggestions which I hope to make.
I said that our problems in the Southwest Development Area were special and different, and to some extent they are unique. I regret that in the Green Paper those differences are hardly mentioned and that the development areas are treated rather as a whole. Reading this document, one tends to forget that there are major differences between one area and another.
First, in the South-West there is a considerable historical difference. Every other development area has recently been dependent on heavy industry, on coal mining, or iron founding, or shipbuilding, or the textile industry, industries which have all declined in comparatively recent years, mostly in the last 10 to 15 years. In the South-West the industrial decline took place much longer ago and our problems are much more longstanding. A much earlier rundown took place in industries like tin mining and textiles not 10 or 15, but 30 or even 60 years ago. There was a time when the far South-West was the industrial area of Great Britain. It was in my constituency that the steam engine was invented, and yet there has been industrial depression in this area for many years.
Another difference between us and the other development areas is that of size. The South-West area contains just over

180,000 working population and the next smallest is in Wales and that is more than five times larger. We are dealing with a peculiarly circumscribed and small area with very special problems.
A third distinction is that, taking the whole area, the South-West is especially dependent on agriculture and tourism, industries which are more readily vulnerable to economic crises than are other parts of the country, and our agriculture is plagued with the problem of small farms and distance from major markets.
A fourth major problem in the South-West is geographical isolation combined with inadequate transport. The problem of transport has been raised time and again during the debate and I must admit that these proposals will not have any significant effect on transport. Nevertheless, it is right that we should remind ourselves that the more isolated development areas are desperately dependent on communications and in the South-West communications are grossly inadequate. Our road links are bad. Our first-class roads, particularly those going directly into the development area, are grossly inadequate, narrow and little more than twisting lanes. We have no motorways, either now or projected, either in or near the area.
Main line rail services are among the slowest in the country and we are threatened with branch line closures. All this is happening in an area with high unemployment rates. The air links which are enjoyed by most other development areas do not exist and there are no commercial air flights regularly in and out of the South-West.
I hope that I have demonstrated that the problems of the development areas, the problems within these huge areas—and we should remind ourselves that, in terms of area, development areas form more than half of Great Britain—vary enormously from place to place. This must mean that any eventual solution must depend on varying measures and that we are naive and searching for the impossible if we imagine that there is one single measure which will solve all the problems of the development areas.
This brings me to an anxiety which I feel about the present proposals and which has been expressed by a number of hon. Members on both sides of the House. It is an anxiety about the lack of selectivity


of this proposal and the suggestion that R.E.P. will be applied like a blanket to every development area throughout Great Britain. I believe that that is a mistaken view and that we should attempt to introduce an element of flexibility, of some variation between area and area, an element of graduation in this premium. We should do this in order to try to ensure that the aid from the Government to the development areas is directly proportional to the needs of those areas.
I am prepared to take these individual areas right down to Ministry of Labour employment enchange areas. This is not easy to achieve in our search for selectivity in the method of aiding the less fortunate parts of our country; it is one of the most difficult problems which successive Governments have had to meet. But why should we always look at the problem in terms of black and white? Again and again in the debate we have heard the dreadful term "grey areas".
We do not do this in other fields. When we are talking about Government assistance to local authorities, nobody suggests that local authorities should be categorised into two groups—those which will get a block form of assistance directly related to a particular feature, such as population, and those which will get no assistance. Various forms of central Government assistance to local authorities are worked out by a formula related to a number of variable factors, such as population or density of population or the size of the local authority area. In my opinion, we should be thinking very seriously in our search to introduce more sophistication into the method of aid. We should be prepared to use new techniques, to use computers and other more skilled and advanced forms of equipment which are available.
We read in the Green Paper that the extra premium will be within a range of £1 to £3. I suggest that it should vary within the range, that the Government should not plump simply for one amount but should seriously consider trying to arrive at a formula so that they can vary the premium in direct proportion to the needs of each area within the range which they have set. In devising a formula they should consider such factors as local unemployment, the existence of industry

within an area, the industrial potential of an area and such matters as transport and social amenities.
If this could be achieved, and if a development index of some kind could be found in this way, we should have an objective criterion related to the needs of the area, and this would overcome many of the objections which have quite legitimately been put forward by hon. Members representing grey areas which are just outside development areas. Moreover, it would go a long way towards solving the most difficult problem of all—that of the hard core of development areas, which are to be found in certain parts of the South-West development area and in one or two parts of Northern Ireland, parts of the country which consistently have a very high unemployment rate, far above the figures quoted in the Green Book for development areas as a whole. If this could be done we should be taking a very big step forward.
One small point arises towards the end of the Report where we are told, about the hard core problem development areas,
It is more constructive to look at the problems of these areas with a view to making most of the kind of resources and potentialities which they do possess.
The rôle of the Highlands and Islands Development Board is brought out. This may well be a valid point to be made about the North of Scotland, but I am unhappy when looking at the proposal in respect of the South-West, representing, as I do, an industrial area in Cornwall. The Report adds:
The potential of other primarily rural parts of the Development Areas throughout the country, including the scope for further development of the facilities for tourism, is being carefully examined by the Department concerned.
This can be linked with a suggestion from the South-Western Regional Council of the C.B.I. which, commenting on this proposal, states that
A significant number of the council members saw the future of the area as one zoned for agricultural and tourist development. A long-term view of expanding industrial conurbations in Britain might suggest that the greatest welfare of the country as a whole lay in the provision of Devon and Cornwall as a tourist resort.
That may be so, but it is not in the interests of the population of Devon and Cornwall to be condemned to be a purely


agricultural and tourist area. This is a concept which all of us in Cornwall would reject utterly.
We have a right in our part of the country to share fully in the industrial development that should be Britain's in the years to come. We have a right to raise our standard of living to something approaching that of the rest of the country. We have a right, more than anything else, to work—and there are many people in my constituency only too pleased to exercise that right if they are given the opportunity. We are not content to be a new depressed area, to be the Deep South of Great Britain, as it were. We will not allow ourselves to become second-class citizens in a second-class region.

8.16 p.m.

Dame Joan Vickers: I am glad to follow the hon. Member for Falmouth and Camborne (Dr. John Dunwoody) in the debate because I face many of the same problems, but as time is short I will not go into the details which I had hoped to discuss.
When the Chancellor of the Exchequer told us that he had shots in his locker, I thought that it would be more apt to say that he had shocks in his locker, because this is a very big shock for Plymouth. When the Secretary of State for Economic Affairs opened the debate he asked us to look at page 8 giving the unemployment rate. I cannot understand how he can leave out certain areas such as the district of Plymouth. I am afraid that because of the time I must be rather parochial, but I should like to draw attention to the fact that the unemployment rate in Plymouth is 35 per cent. and that it has been as high as 4.9 per cent. When it reached 4.9 per cent. in 1959, the Government of the day introduced the Local Employment Act. Between 1959 and 1964, 33,000 new jobs were created in the West as a whole and 822 industrial development certificates were issued.
Now Plymouth is to be left out of the provisions. Already one factory has left the Plymouth district and another may have to leave. This is very serious. The right hon. Gentleman talks about human frustration and poverty. I can assure him that frustration is growing in

the Plymouth district, the wages there are about £3 below the national average.
I should also like to comment on training in the Government training centres. A centre was recently opened by a junior Minister to the Ministry of Labour, and it was stated that it cost about £1,200 to train a man. I have a newspaper headline here, "The trained man nobody wants." I hope that the hon. Member will take this point seriously. This is a newspaper report which has been confirmed, and I was telephoned about it. This man stated "The dockyard would not take us", and the private firm he went to see did not want him once they knew that he had come from a training centre. Firms seem reluctant to take Government-centre trained people, and a local official of the Ministry of Labour said that the position is very difficult.
We have an additional worry in that the Americans are coming over here and starting a recruitment drive. They are offering to interview people at both Newton Abbot and Plymouth, and they intend to offer them £80 a week if they will do a 60-hour week. This will be a further drain on our skilled labour, which is becoming very short. A real effort should be made to get firms and trade unions to accept people who are trained at the Government training centres. They should realise that this is in many ways one of the best forms of training. In my opinion, the apprenticeship period in many cases is too long, except in the skilled trades such as toolmakers. This type of training, with changing types of machine, many of them being automatic, is very good and should be supported.
It will be a great waste of Government money if these trainees are not accepted in industry. I recently went to Taranto in Italy, and there I discovered the great extent to which they go to get people in employment. The hon. Member for Lancaster (Mr. Henig) asked how much it would cost per man in this country. I discovered in Taranto that the cost was 70 million lire per head to get a job. What is this scheme going to cost?
We have to ensure that the money is spent wisely. As about 80 per cent. of the firms employ fewer than 200 persons, I do not think that the money will be a great deal of use to them except perhaps in encouraging them to hoard labour. Therefore, I am not in favour of the tax,


but if the Government are determined to bring it in, I think that it should be given to all areas with high unemployment figures. I should be glad if the Government would look into this.
The arbitrary boundaries that have been drawn now make life extremely difficult. Instead of our having a sudden boundary between districts—between those who are entitled to the premium and those who are excepted from it— I think that assistance should be extended to neighbouring areas scaled down a step at a time, thus avoiding the discrimination which appears to exist as between the Plymouth area and its neighbours. Grants should also be varied periodically in proportion to the rise or fall in unemployment.
One of the difficulties at the moment is that we are not pressing on with the grey areas. What is needed rather than this type of Government aid is some plan whereby smaller firms can invest in machinery. It is by having modern machinery that we get better exports. Furthermore, in an area such as the South-West—this happens in Scotland as well—far too many factories have to send their products to Birmingham or other Midland towns for certain processes to be done. For instance, we cannot get casting, silk screen printing and plating done in the Plymouth area. So certain products have to go to the Midlands and then come back again to be made into finished products, which makes it all extremely expensive.
I hope we may be told why certain areas with high unemployment figures have not been made into development areas. I should have thought that the Chancellor could have been flexible in this respect. When the Plymouth area came under the Local Employment Act, it was taken out as and when the employment figures went down to the national average. Now that they are above the national average, I hope that the Government will not look upon the development areas as arbitrary areas shown on a map but will be flexible and that areas with high unemployment will be included. I should like to know why the Chancellor has made these arbitrary distinctions between areas which may have unemployment figures as high as areas which are now considered as development areas.
There is also a drain of young people away because of the lower wages

in the area. I mentioned an American firm offering very high rates of pay. One factory in the area has already closed down, and another is likely to move away because of its difficulty in keeping down costs as a result of transport difficulties.
I should like an assurance from the Chancellor that he will be flexible in regard to the development areas so that an area like Plymouth in the South-West does not become completely drained of all its skilled labour, which might easily happen. We need to encourage people to stay in the South-West. We have a very high proportion of elderly people there, and so it is all the more important to retain there all the young people we can. If they are tempted away because we cannot give them the extra that they need from the factories in our area, it will be extremely serious. With the possible running down of the Dockyard as a result of having a smaller Navy, the Plymouth area may become a very distressed area if something is not done in the very near future.

8.26 p.m.

Mr. Arthur Blenkinsop: I will not follow the hon. Lady the Member for Plymouth, Devonport (Dame Joan Vickers), although I fully appreciate the problem that she has put to the House in regard to areas like her constituency and others mentioned by several of my hon. Friends who represent areas where there are old industries decaying and where we certainly want to introduce new opportunities, as we do, of course, in the development areas.
What I find rather surprising is that those who have expressed these criticisms should have regarded this as good reason for opposing these proposals. It seems to me that these proposals are not to be seen in isolation but are part of a whole range of actions that the Government have been taking over a period of years. It is, therefore, rather foolish of certain hon. Members who have made criticisms to suggest that this was the only proposal that the Government were bringing forward to deal with the deep-set problems of unemployment in many areas, not only development areas.
I am delighted that my right hon. Friend the Secretary of State for Economic Affairs had such a welcoming reception in my area of the North-East,


where he was able to say—I am sure it is right—that the proposals are welcomed not only by the trade unions but also by industry in that area.
I am glad that one of my hon. Friends referred to the need for selectivity in the use of this kind of machinery. I am sorry that some have not welcomed the fact that these proposals are an attempt by the Government to use and develop from the Selective Employment Tax a more selective form of attack upon some of our problems. I certainly hope that this is not the end of the day, or of the series of recommendations that they will make.
Some form of graduation might be a very good thing if it could be worked out, but I doubt whether the kind of proposal put forward would be practicable to work out in these terms. In an area like the North-East, although this is not exclusively a North-East problem, one difficulty that we face is the need to attract work for some of the most highly trained engineers and technicians, not just for the skilled labour, for whom possibilities are now improving.
We find that more industries are coming to the area, and we welcome this, but many of these, particularly those involved in electronics, do not bring their major design and planning development staff to the area. They remain in the South and elsewhere, near to the main research centres. I am sure that it is true that in our regional policy we want to try to do something specifically to encourage as broad a range of opportunities for the people in the region as we possibly can.

Mr. Alfred Morris (Manchester, Wythenshawe): Mr. Alfred Morris (Manchester, Wythenshawe) rose—

Mr. Blenkinsop: I cannot give way, I only have five minutes, it is quite impossible. It is right that we should stress the importance for all our own development regions of trying to get that kind of range of occupation, and for that reason we should look at the training facilities in our areas to see that for the more highly skilled technicians and technologists there are chances of development.
Like the hon. Lady the Member for Devonport, I was recently in Southern Italy looking at some of the exciting developments taking place under the guid-

ance of the Italian Government. While it is perfectly correct for her to comment on the cost of some of the developments, such as the steel works in Sorrento and elsewhere, what was fascinating was the extremely wide range of direct action taken by the Italian Government.
I echo some of the points made by my hon. Friends, and I hope that Her Majesty's Government do not regard these proposals as the last set of proposals to make. I am most anxious that we should have as wide a range of proposals to operate as we can, and that we should include within them the kind of action taken by the Italian Government, such as tax-free holidays in other countries, in the Common Market and elsewhere. They also make provision requiring that Government Departments and nationalised industries must order at least 30 per cent. of their requirements from the development areas, in their case in Southern Italy. These are proposals that we still have not used in Britain.
I very much approve of the comment made by my hon. Friend the Member for Fife, West (Mr. William Hamilton) that we still need to ensure that we are prepared to use direct Government action and are prepared to install Government industries in certain cases to ensure the kind of economic balance that is needed. I hope that when he comes to wind up my right hon. Friend will make clear that none of these proposals that have proved their value in other countries are excluded from our range of possible action.

Mr. Kevin McNamara: On a point of order. I wonder if you could inform the House what criteria you use regionally for the selection of speakers today—[HON. MEMBERS: "Oh."]—because—

Mr. Deputy Speaker (Sir Eric Fletcher): No. Hon. Members are not allowed to criticise the selection by the Chair of those who address the House.

Mr. Heffer: Further to that point of order. It was stated by Mr. Speaker at the beginning of this debate that there would be an attempt to make certain that every development area was represented in the debate. I would like to point out that there have been four speakers from Scotland, three from the South-West, and


speakers from every other area, except the Merseyside district, which has one of the most serious under-development problems in the country. I would like to ask whether this problem could be looked at again in relation to further debates on this question.

Mr. Deputy Speaker: What the hon. Member has said will appear in HANSARD and, no doubt, Mr. Speaker will read it, but nothing must be said which implies any criticism of the Chair for the way in which hon. Members are selected to take part in the debate.

Mr. Alfred Morris: Further to that point of order. This is not in any way a criticism of the Chair. At the beginning of the debate, as at the beginning of many other debates, Mr. Speaker requested right hon. and hon. Members to be as brief as possible in making their speeches. May I ask, Mr. Deputy Speaker, whether we could receive any progress report, as it were, on the success of those wise and useful appeals from Mr. Speaker?

Mr. Deputy Speaker: As the hon. Member knows, that is not a matter for me. Appeals have repeatedly been made from the Chair to hon. Members to keep their speeches as brief as possible. It is obvious that the number of hon. Members who can take part in any debate is governed very largely by the length of speeches which other hon. Members make. Hon. Members have this entirely within their own control.

8.35 p.m.

Mr. Robert Carr: This is a debate which is of vital interest to many areas and, therefore, to many hon. Members. If I have kept the tally right, I am no less than the sixteenth hon. Member to speak in this debate.Considering the inevitable delays as the beginning of the debate, which we all understand, that is not a bad performance for the House.
The subject is of profound importance both economically and socially. Before I come to the substance of the matter, I wish to make a plea to the Chancellor. If, when he winds up the debate, he tells us that the Government have definitely decided to go ahead with the scheme, whatever we may say about it or against it, and if they are determined to go ahead with it by inserting a Clause in the Finance Bill, I ask the right hon. Gentleman seriously to ensure that the House

has adequate time to discuss it when we reach that stage. That will be the opportunity when many more hon. Members, in all quarters of the House, can put the points which they need to put on behalf of their areas and in general argument.
That is particularly important, because it was obvious from the reception and the comments which the First Secretary received during his speech that doubts and, indeed, opposition to the scheme are by no means confined to this side of the House. I hope, therefore, that the Chancellor will respond in a generous and constructive way to that request.
I stress at the outset that the Opposition are wholly in sympathy with the purpose of the proposals contained in the Green Paper. My right hon. Friend the Member for Enfield, West (Mr. Iain Macleod) made that clear in his initial reaction to the announcement of the Green Paper at the beginning of April and my right hon. Friend the Member for Argyll (Mr. Noble) also made that clear in opening the debate from this side today.
To underline the point further, I should like to quote two short passages from the Green Paper which we wholeheartedly endorse. The first is the last sentence of paragraph 13:
There is therefore every reason for wanting to reduce this disparity in economic activity between the development areas and the rest of Britain.
My second quotation is from the beginning of paragraph 22:
… the efficient management of the economy and the optimum use of manpower require major new measures to be taken to produce a more even distribution of industrial development as between the different regions, and as a result to secure a further substantial narrowing of the unemployment gap between the development areas and the rest of Britain.
With both those fundamental quotations from the Green Paper we wholeheartedly agree.
We can, therefore, say that the whole House is agreed about ends. I think that the whole House is also agreed that this is the time when major new action should be taken to secure those ends. Where we do not agree, however, is with the means proposed by the Government in the Green Paper. As my right hon. Friend made categorically clear in opening the debate from this side of the House, we shall oppose these proposals when the


time comes, for the reasons which I shall give.
The proposal for a regional employment premium is one of considerable economic ingenuity, but we feel that it is one of those highly theoretical concepts thought up in an economist's ivory tower, remote from the realities of the industrial firing line and lacking that touch of practical experience about what makes things tick in industry in relation to decisions about investment, prices and wages. We have had experience of a number of such "clever-clever" schemes in the last two and a half year. It is white elephant from an ivory tower. It reminds me of the story of the vicar who was rash enough to ask rhetorically from the pulpit, "And who wants a white elephant?", to which one less reverent member of the congregation replied, "Another white elephant". That is what we feel is happening to Government policy.
We are confirmed in this scepticism about the translation of theory into practice by what I think, despite what the First Secretary said, is the almost unanimous view of the management organisations of industry and of practical industrialists who have expressed their views to the Government—including, interestingly enough, even those most concerned with the development areas, who also, one might note, stand to profit most from their greater prosperity. Even the General Secretary of the Scottish T.U.C., after beginning by welcoming these proposals wholeheartedly, subsequently had second thoughts and expressed grave anxiety about how they might work in practice.
Industry, naturally, is not disinclined to pick up a cheque for £100 million from any Government. Its instinctive reaction is to accept gratefully and not look such a gift horse too closely in the mouth. The fact that industry has so unanimously expressed so many doubts and objections about this proposal should, therefore, be taken all the more seriously by the Government, who should consider these arguments extremely fully before charging ahead. Although I hope that this will not be the last word in development policy, one practical certainty about which we can surely all agree as realists is that no Government in the next few

years are likely to embark on more than one new policy initiative of this scale. It would, therefore, be a great tragedy if, through acting too hastily, we got our choice wrong.
We do not dispute, and nor does industry, that the prolonged application of regional employment premiums would raise the level of activity in the development areas relative to the rest of the country, but the emphasis must be on the word "prolonged". In our opinion and that of industry, to obtain the payoff, the premiums would have to operate for very much longer not only than the five years mentioned in the Green Paper, but also than the seven years to which the First Secretary extended the period today.
It is also essential that it should be known from the start that this was to be the case, because to introduce this system to last only seven years would mean that we should suffer nearly all its disadvantages while gaining few of its potential benefits.
What is in dispute in our judgment of this proposal is the magic which the Government claim for it, which is in two parts. The first is that it is self-financing, that this is a method by which as much as £100 million a year can be injected into the development areas with no compensating increase in taxation. The second is that, in as short a period as three to five years, it could narrow the employment gap very substantially, perhaps, according to the Green Paper, paragraph 27, to the extent
… that the average disparity between unemployment in the Development Areas and the country as a whole might be reduced by something like one half … over and above the degree of success expected from existing programmes.
It seems to us conceivable that the scheme might achieve both of those things in the really long run, but it is almost certain not to achieve them in a period as short as the next three years or so.
In the short run, we do not believe that exports from the development areas to either foreign countries or other regions of the United Kingdom are likely to rise by any measurable extent. A large part of the extra demand generated in the development areas by R.E.P.— by higher wages or lower prices—is likely to spill over into other regions and/or result in a demand for more imports.


In our view, and in that of industry, a significant part of the annual £100 million would be eaten up in higher earnings, particularly in view of the acute shortage of skilled labour in the development areas. Nobody can be certain exactly how much that would be, but it is significant that the C.B.I., which is not without great experience in these matters, thinks that as much as 50 per cent. could be eaten up in this way—and that, as the Green Paper makes clear, must not happen if this proposal is to be successful.
In the short run, also, we do not believe that R.E.P. will be a sufficient incentive, either to existing firms in the development areas to expand or to new firms to come in and establish themselves on a scale anything like sufficient to achieve the reduction in unemployment mentioned in the Green Paper, particularly if there is the slightest feeling that the premiums might be removed after a period as short as seven years.
It is for all these reasons that the short-term magic claimed for R.E.P. is, we believe, utterly illusory. And if these claims are illusory, then the undoubted objections to the proposal and the superior claims of other forms of expenditure in the development areas become paramount. That is the basis of our opposition to this scheme.
What are the main requirements of a successful policy for the development areas? As we see it, first it should attract new firms to these areas and attract firms already in them to expand. Secondly—and this is extremely important—the sort of expansion encouraged should be based on higher productivity and efficiency and on activities which have a long industrial future ahead of them so that the induced expansion forms the basis of self-sustaining growth in these areas for the future.
We believe that once one removes the magic of this proposal R.E.P. fails on both of those counts.
While R.E.P. will certainly increase the attractiveness of the development areas, it will not do so as much, or at least as quickly, as other measures which I shall mention. Far from encouraging higher efficiency and productivity, it will be a direct incentive to the inefficient use of manpower in all manufacturing industries. It will place a heavy burden on the service industries, certainly in the first

stage; industries which are so vital to the prosperity and export-earning capacity of large parts of the development areas.
What, then, would be the main bad effects of R.E.P., in more detail, which we strongly fear? First and above all, as we said in the debate when we discussed these problems on 24th April, it compounds and magnifies the grave faults and distortions of S.E.T. itself. It is wrong, in our view, in principle to pay a premium for employing labour in manufacturing industry, because to do so create a pressure which is the very opposite of the one which this country requires.
It is perverse and wrong in principle that all employment in manufacturing should be subsidised and all employment in service industries should be taxed. It is particularly damaging for large parts of Scotland and the development areas, such as large areas of Wales and the south-west of England. To take the example of Scotland, as the Scottish Council made clear in its submission to the Government, more than 1 million people in Scotland are employed in service industries and less than three-quarters of a million in all manufacturing industry. It is crazy to create a deterrent rather than an incentive to employment in the service industries when we have conditions like that.
Moreover, not only the prosperity of the people in those areas but the balance of payments is at stake. While I take the point of the hon. Member for Falmouth and Camborne (Dr. John Dunwoody) that the people in these areas do not wish to be entirely dependent on service industries and tourism and want as great a share of industry as they can get, we must be realists and accept that these are extremely important tourist parts of the country and that to give a stimulus to tourism in these large areas of Scotland and the development regions is at least as likely, and probably more likely, to produce as much impetus to foreign exchange earnings in the short-term as can possibly be obtained from manufacturing industry.
Our second major objection to the R.E.P. is that so much of the extra money which will be pumped into these areas will go to support activities already established. It will go to firms already


there for continuing to do what they are already doing. Surely, in principle, money would be more effectively spent on pump-priming new activity rather than on subsidising what exists already.
Our third objection—and it is closely linked to the last-mentioned objection—is this. Just as we should be encouraging the new rather than subsidising the old, so we should be giving an incentive to productivity and efficiency. This is exactly what the Selective Employment Tax does not do, and now in much magnified form what the R.E.P. would not do.
We have heard from a number of hon. Members on both sides of the House, including my hon. Friend the Member for Clitheroe (Sir Frank Pearson), and we saw it also in the interruptions suffered by the First Secretary—concern about what are called the "grey areas" It is true that any system of scheduling development areas creates aribtrary geographical lines, and one is unlucky if one is on the wrong side of the line. This is, to some extent, inescapable. But there is all the difference in the world between pump-priming aid and a continuing subsidy. The sort of differentiation which would be created in this scheme between the development areas and the grey areas is very much greater and more serious than the differentiation which existed before.
Those are our major objections. Let me come to the positive side. How could we spend extra money more effectively? This is the key to the question. I shall not go into this matter at great length because we outlined in the debate on 24th April what we believed to be the main ways in which extra money should be spent.
First, and above all others, we believe that more money should be spent on facilities for and the encouragement of the training and retraining of young people and adult workers of all ages. We know that much is being done and we do not want to belittle it, but we believe that still more should be done, and it is more important to do more in this field than to indulge in expenditure on R.E.P.
We also believe that expenditure in this field would be just as self-sustaining as expenditure in the form of the R.E.P.

My right hon. Friend the Member for Argyll pointed out that of the 200,000unemployed in Scotland and development regions only 33,000, according to the Ministry of Labour, are immediately available for employment in manufacturing industry, and in Scotland, according to the Scottish Council quoting figures from the Ministry of Labour, 6,000 out of the 85,000 are immediately available and suitable for manufacturing employment. It is the certainty of the availability of sufficient skilled manpower which above everything else is the resource which industrialists look for if they are to go to development areas. So we say that spending money on even more training and retraining is priority No. 1."
Priority No. 2 is the economic infrastructure, and particularly communications by road, rail and air. No doubt the House will think that I am biased in talking about aviation matters, but let us look ahead a little to the time when people in this country think of air travel as they already do in the United States and, I fear, in Europe more than in Britain, and realise that a little money spent in encouraging good facilities for air travel might be a powerful help in opening up the development areas.
Thirdly, there is the social infrastructure—better housing, schools, hospitals and recreational facilities and clearing up the relics of an old industrial age. We have to be human about this. When we are thinking of new firms coming to these areas, whether they are branch factories of firms in this country or of foreign firms coming from abroad, we must remember that the people who make the decisions and whose senior colleagues have to manage and man those factories and the key workers who have to be brought in to start things up are very much influenced by the living attractions or otherwise of the area to which they come.
As we said on 24th April, we believe that we were right in the last year or two of our 13 years to concentrate on growth points and that that is where the money should be spent. We should get away from the idea of spreading the jam all over the bread as the present Government try to do. There should also be a return to our system of encouraging investment by the removal of present investment


grants, and a return to investment allowances coupled with free depreciation. It is interesting to find that Mr. Bird and Mr. Thurlwall have made an analysis which is published in this month's edition of the District Bank Review which shows that the degree of fiscal discrimination today in favour of investing in development areas is less than that which existed in 1963. That is the substance of the last proposal I have made.
These are the sorts of ways in which extra money could be spent more effectively in development areas and in Scotland and Northern Ireland. The First Secretary of State and Secretary of State for Economic Affairs said that the effects of expenditure on infrastructure are slow to mature, but so will be the effects of R.E.P. He admitted that this afternoon. We shall also be told that the sort of expenditure I have suggested is not an alternative. That is what the First Secretary told us today. He said that the money is not available for the extra expenditure of the kind I have been talking about. We simply do not accept that proposition. The Chancellor may chuckle if he likes; but let him answer the argument in a few moments. We have already exposed what we regard as the fallacy of the self-financing aspect of this proposal—at least in the first few years. I think even the Chancellor will not be able to deny that a significant part of the £100 million a year proposed for R.E.P. will not be self-financing. In the sort of field about which I have been talking a great deal extra could be done with an annual additional expenditure of very much less than £100 million.
Moreover, we believe in any case that, even with the R.E.P., if it is to be effective extra expenditure will be needed on training and on economic and social infrastructure of the sort I have mentioned. We think that will be needed in any case.
Further, regional employment premiums are not the only possible form of self-financing payment to the development regions. They are not the only way of working the magic—if effective magic it be—in improving a region's balance of payments with the rest of the country. If employment is to be subsidised, there are other and, in our view, probably better things to be subsidised than the total numbers employed.
I want, therefore, to put forward for tentative consideration what I might call the proposals which would go into an Opposition "Green Paper". First, subsidise training expenditure by firms in development areas to a much greater extent than at present. Secondly, subsidise research and development expenditure in development areas. This would attract science-based firms which have the quality which I spoke about earlier of a long-term industrial future. Thirdly, abolish, as the hon. Member for Aberdeenshire, West (Mr. James Davidson) called it, this lethal S.E.T., which we have opposed from the very beginning, and replace it with a non-discriminatory employment tax with varying regional rates.
All these would be subsidies on current costs, just as much self-generating, just as much a system which does not require taxation, as the R.E.P. proposal itself. I suggest that the trio of measures which I have just mentioned would be more effective, more quickly acting, would promote productivity and efficiency, and would alter the balance of payments position as between the regions and the rest of the country.
In conclusion, I ask the Chancellor this question: have the sort of ideas I have just been putting forward been considered by the Government? Has industry been asked about them? If not, why not? If so, what were the views of the Government about them? And what were the views of industry about them? What is against the proposals I have just put forward? It is farcical for the Government to put out on 5th April a radical new idea with a great fanfare of publicity to the effect that everybody would be asked for their views about it so that we could all share in this decision together, and then come to the House a bare two months later—two months to the day actually—with closed minds and having already taken an irrevocable decision.
In any case, why the hurry? Is not this another bit of instant government, just another gimmick? Paragraph 27 of the Green Paper says that the R.E.P.:
proposal is not advanced as a short-term contracyclical measure".
But is it not as a contracyclical measure that the Chancellor is in fact rushing it forward? Is he not now only too aware that, as we told him at the time of the


Budget, his economic analysis was wholly wrong? For this purpose, as a contra-cyclical measure, it is, in our view, bad. It is bad because it will have little or no reflatonary effect in 1967, when there is some room for reflation, and it will begin to take effect in 1968, when there will be much less room for reflation, if any room at all.
I end where I began. We are wholeheartedly in sympathy with the purpose proclaimed in this Green Paper and we have put forward alternative proposals to what appears in this Green Paper as well as disagreeing with the proposal in the Green Paper. Let the Chancellor not only defend his proposals here but let him answer the objections to them, objections which he has had from every quarter in industry, and let him also consider and answer the alternative proposals which we have put forward. Until we hear far more effective arguments than have as yet been given to the House or the country, we shall oppose this proposal.

9.5 p.m.

The Chancellor of the Exchequer (Mr. James Callaghan): I am very glad to take part in this debate because I have represented a constituency in South Wales for 22 years now—

Sir Douglas Glover: Too long.

Mr. Callaghan: The hon. Member for Ormskirk interrupts me in his usual fatuous and sedentary manner. Fortunately, the electors of Cardiff, South-East do not agree. What I have seen in travelling up and down the valleys of Wales during that time convinces me, at least, of one thing, which the right hon. Member for Mitcham (Mr. R. Carr) stated only to contradict, that the time for some new action has come.
I have no doubt whatever that this bold and novel proposal is as dramatic a proposal as anything which has been put forward for the development areas since the original introduction of the development area concept itself. The problem must be seen—I say this to those of my hon. Friends who represent other areas—in its historical context. What we are dealing with here, and what this proposal is designed to deal with, is the special problem of the old original

industrial areas of the country whose major industries are suffering from the transition caused by the second industrial revolution.
Up to the Second World War, Scotland relied on coal and shipbuilding. Wales relied on coal and steel. Since the Second World War, we have seen increasingly the growth and development of manufacturing industries in both those countries, and also in the north-east and northwest regions. But that is not in itself enough, because the first Industrial Revolution concentrated in particular areas, and for particular purposes, whole communities with deep roots going down into the soil of the valleys in which they lived. They have now been left behind, stranded, as it were, by the tide as it receded.
We are dealing here, also, with a difficult problem, the problem of—I use the word now, hoping never to use it again—the so-called grey areas. What is to be the future of these communities? There are those who say—the right hon. Gentleman himself said it—that we need more time. This is not a last-minute proposition. When my right hon. Friend the First Secretary of State put it forward at the beginning of April, he said that he hoped that discussion could be concluded in a matter of weeks—that was the phrase he used—so that we could get on with it. It has nothing to do with any change in the assessment of the economic situation. I realise that the right hon. Gentleman has to make that sort of point, but it has nothing whatever to do with that situation. I understand the difficulties in opposition; I spent long enough in it myself. In fact, there is nothing in this great proposal—it is a great proposal—which relates to the situation either of the economy today or of the economy next winter. It is a major initiative designed to overcome, as far as we can, the problems of our great industrial areas.
We have done a great deal, starting in 1945 and working on throughout the last 20 years or so. Communications have been improved, and I shall return to that point later. Training has been improved—very much more so in the past two or three years than when the right hon. Gentleman had responsibility. The infrastructure has been improved. I am not speaking theoretically. I have seen the


improvements; I have seen what is happening in these areas now, and the measures we have taken have had their impact.
But a great many problems still remain. Let us take the problem of coal, for example. The coal industry has a great future before it. I have no doubt of that, and the Government certainly intend to ensure that it has an economic future, one that will give great employment and a future to those engaged in it. But let us look at what has been happening as the coal mines have closed down. The coal industry was a heartless, soulless industry when it was under private ownership. The National Coal Board is attacked for a great many things, but let there be no doubt about this—and my hon. Friends from mining constituencies know it: it has accepted more social responsibility than any private owner ever did, or thought of doing.
But what has happened? As a social responsibility, the Coal Board—[Interruption.]—I do not care if the hon. Gentleman sniggers—accepted the employment of people who were the human debris of the coal industry. It has employed them and kept them in jobs. No other employer could have done that. But when the pit closes down, what happens? One cannot expect another employer to take them on. He does not have the responsibility that the Coal Board has felt that it has had and has exercised.
One of the problems of the Rhondda Valley, as my hon. Friends the Members for Rhondda, East (Mr. G. Elfed Davies) and Rhondda, West (Mr. Alec Jones) know, is the number of disabled men. I do not say that the proposition with which we are now dealing will necessarily help those men, but a social responsibility lies on us to help them, and we cannot accept defeat there. I ask my hon. Friends from other areas to understand that the proposition is designed to overcome the deficiencies in our industrial system as a result of the contraction of the coal industry and the changes in the shipbuilding and steel industries. That is one of the reasons why we must press ahead with it, even though many hon. Members would like to see refinements to it. That is the background to the proposal—I shall not give way to my hon. Friend the Member for Westhough-ton (Mr. J. T. Price) I can see him

teetering on the edge of his seat, but I have had experience of him before.
That is why the proposition is put forward, and why I believe that it will succeed. Its purpose, if it is carried through will be to create about 100,000 new jobs in these areas. It will reduce the number of unemployed by 50,000. That will be a tremendous surge forward, if the programme is carried through in the way we have designed and for the period that we want to discuss.
I was asked about procedure. My right hon. Friend the First Secretary was quite clear. He said that as a result of all the opinions we have received and that have been canvassed, we have decided in principle to go ahead with the proposition, and it is something that will redound to the credit of the Labour Government in years to come, in those valleys, in Scotland and in the North-East. Let there be no doubt about that.
We intend very shortly to publish a White Paper. We wanted to listen to the debate and hear some of the criticisms that were put forward and some of the alternative ideas that might be suggested in relation to the scheme. We would then propose to add a new Clause to the Finance Bill. A new Clause will find its place among all the remaining new Clauses in the Finance Bill and, no doubt, it will receive the appropriate attention and be discussed properly under your guidance, Mr. Deputy Speaker, when you are in the Chair.
That is the procedure which we want to follow. What do the right hon. Gentleman and the Liberal Party suggest? They are all in favour in principle, but not of doing it in this way. They say, "Let us do something else". It is the old, old story. The right hon. Gentleman seemed to be backing his white elephant both ways. He does not want to appear in Scotland and Wales, and no more do the Scottish Tory Members—there are very few Welsh Tory Members—as having opposed the proposal when it will bring such great benefits to those areas. They say that they are in favour of the principle, but when it comes to detail they are utterly opposed. I always thought that that was the Liberal approach, but the Tories seem to have taken it over.
We intend to proceed, therefore, along these lines. If we followed the proposals


put by both the Conservative and Liberal spokesmen, how long do they think it would take to turn over to the new kinds of taxation they are talking about—to draft the measures to get them through? I would say that it certainly could not be done this year. I suppose that it might be done in another 12 months, perhaps in the Finance Bill, 1968, but we would have lost yet another 12 months in trying to tackle this problem at its roots. What the right hon. Gentleman proposed on procedure alone, leaving the merits to one side, would delay the implementation of this proposal, which is going to bring such considerable benefit.
The right hon. Member for Argyll (Mr. Noble) asked whether what we were doing would conflict with the Treaty of Rome. We have looked at the international aspect. In our view, the proposal does not conflict either with the General Agreement on Tariffs and Trade or with the E.F.T.A. requirements under which we are working. We have been getting a lot of information about policies in the European Economic Community and also about the actual working out of those policies, which sometimes is rather different from the theory.
We take the view that, whilst our procedures under this kind of proposal will undoubtedly be examined, they are not a barrier at the present time, that they can be implemented and that we would have very good grounds for arguing, on the basis of what is done by existing members of the Community, that they are not ultra viresthe Treaty of Rome, certainly not in the application of policies.
The right hon. Members for Argyll and Mitcham asked, "Why do you not do more training, build more schools, more hospitals and more new roads?" But this proposal is not an alternative. It is in addition. All these things are being done already. We are building more roads and more schools in these areas.

Mr. MacArthur: Not in Scotland.

Mr. Callaghan: I will give the hon. Gentleman the figures. He should know them as a Scottish Member. In 1963–64 the expenditure on new construction of roads in Scotland was £22 million. This year it is £36 million—nearly two-thirds greater.

Mr. MacArthur: Mr. MacArthur rose—

Mr. Callaghan: The hon. Gentleman did not think that I had the figures—and I have.

Mr. Noble: Will the Chancellor also remember that in the Government's plan for expansion in Scotland the rate of development for Scotland is slower than the rate planned before?

Mr. Callaghan: The Opposition try to ride off on one argument, having been defeated on another. The right hon. Gentleman says that the rate of development is lower than they planned. They planned with an £800 million deficit per annum. Any one can plan on that basis. I could devise wonderful schemes on that basis and leave my successor to pick up the check. The truth is that the Tories know, despite their propaganda in their Scottish constituencies, that more in real terms is being spent on roads, schools, hospitals and housing under this Government than was spent under them.

Mr. MacArthur: Mr. MacArthur rose—

Mr. Callaghan: No.

Mr. MacArthur: Mr. MacArthur rose—

Mr. Speaker: Order. The Chancellor of the Exchequer is obviously not giving way.

Mr. Callaghan: I have not much time. I do not complain, but I shall not give way.
I come back to my point. These are not alternatives. What is happening is that the Labour Government are increasing their expenditure on these subjects that the Opposition are now so keen on, and, in addition, they intend to add the regional employment premiums on top of that. That is the truth of the situation.
I say to the right hon. Member for Mitcham that it is not obvious to me that we can build new schools and houses and roads without using resources. One of the features of this proposal, and what we want to do—the right hon. Gentleman was suggesting we could—is to try to ensure that in putting this scheme into effect we do not involve the country in extra taxation. If we build new schools, roads and houses, they make a call upon resources which would have to be met by additional taxation.

Sir D. Glover: They can be met by growth and by savings.

Mr. Callaghan: Of course, they can be met by growth and by savings and, no doubt, will be partially met by growth and savings but there comes a limit to all of these things. In the state of the economy which we shall be running, in in which there is full employment—98 per cent. of people at work—and in which there is growth and pressure of demand, adding to these programmes beyond a certain limit—the right hon. Gentleman must understand this—would clearly mean that there would have to be increased taxation on ordinary citizens.
The merit of these proposals is that they are designed in such a way that they will not require additional taxation to be raised in order to meet them, so it is no use saying to me, "If only you will spend more on roads and houses and all the rest of it, you will do the same thing much better." Apart from there being a difference of view about it, it does not happen to be the same sum. I agree with the hon. Member for Belfast, East (Mr. McMaster) and many others who have practical experience of these areas, that it is not enough to build communications, to have the social infrastructure. They are necessary, desirable and important and I agree with all that has been said about them. All these things are important, but they are not enough, and we have shown this by all the efforts which have been made by the Government, by our predecessors and by the Labour Government of 1945–51. We have not cured this sore by these methods. Therefore, it is vital that we should try out this new system which we are now undertaking.
I should like to refer again to this problem of the so-called grey areas. I ask my hon. Friends who come from those areas to agree that if I promise not to use the term again, they will not do so. Can we not find a better term than that? It is a dreary description. [HON. MEMBERS: "They are dreary."] This is a rather different problem. It is one in which there has not been this great concentration upon two or three major industries which have now been circumscribed and whose function has changed. The problem is one where there does not seem to be growth at the rate which my hon. Friends and hon. Gentlemen opposite would like and where population is moving away. It may well be susceptible to a different solution.
Whereas in development areas we have had 30 to 40 years to find the facts—there are no new facts to be known about the development areas; we all know that story well enough; we have lived through it and seen it—in these new areas it is worth making a study to see what is needed, then, if necessary, taking the appropriate action to ensure that they are given the same opportunity as any other area. That is the proposal and the way in which the Government want to tackle this problem.
The fact that there is a relatively new problem in these areas should not deter any of my hon. Friends from allowing the Government to go forward with this proposition for helping the long-standing canker of the development areas. I can tell my hon. Friends from other areas that we shall proceed on that basis.
I now come to the question of timing. The proposal in the White Paper was for a five-year period. The right hon. Member for Mitcham thought that that was not sufficient and spoke in terms of a three-year or five-year period. The Government have considered the matter again and have listened to the representations which have been made. In our view it is right, as my right hon. Friend said, that the scheme should exist in full for seven years and that it should then begin to phase out—obviously a review will be made nearer to the time to see how it is going, but this is our present intention—coming to an end theoretically after 10 years or so, because we could take two or three years to phase it out. We are therefore dealing with a long-term scheme.
The Opposition seem to be divided among themselves, between those who say that this scheme will have no impact, which is roughly the position of the Opposition Front Bench, and those who come from the so-called grey areas and who say that it will be the most powerful magnet ever seen. Obviously, both cannot be right. I can only say from my own experience and my own contacts with industrialists that when this proposal goes through, it is likely to have the most profound effect on their thinking about their new investment programme. [HON. MEMBERS: "Rubbish."] Hon. Gentlemen are always ready to interrupt, but I can tell them that I have had contacts with industrialists and discussed their future investment programmes with them, and it


is my considered opinion that a premium equivalent to about 7½ per cent. of labour costs—and that is what it means—will have a remarkable effect upon their thinking. It is 7½ per cent. on labour costs and 2½ per cent. on total costs.

Mr. Iain Macleod: Why are they against it?

Mr. Callaghan: They are not. Many of the trade associations are against it and many of the spokesmen are against it. But if the right hon. Gentleman talks to industrialists in the development areas he will see that that is an entirely different proposition and that they are not against it. I have talked to them; I do not know whether the right hon. Gentleman has done so. He represents a prosperous London suburb, but I have talked to the people in South Wales, and I know that they are not against it and that many of them will welcome the proposal and will find it of great assistance to them.
I think that I have covered the major issues which have been raised in the debate, although there are many other, not smaller but different, points to be made. Perhaps I should say something about the steel industry and about boundaries. First, it is clear that problems will be caused to areas on the edges of development areas. I should know; I represent one of them—Cardiff—and

so hon. Members cannot say anything to me about it which I do not know. Nevertheless, I am willing to put my weight behind this proposal, because, whatever disabilities areas may suffer, there is no doubt that this proposal will bring great benefit to the other areas inside the development area boundaries. However, boundaries can be looked at and revised from time to time and I give the pledge that that will certainly be our intention.
We have naturally considered the future of the steel industry after nationalisation and have decided to continue investment grants and to bring the steel industry into the scheme on the same basis as at present, the nationalised and non-nationalised sectors alike. This is a manufacturing industry and we think it right to give it those advantages.
I conclude by saying that this is one of the boldest and most dramatic gestures to have been made in these areas in the last 40 years. It deserves the support of the House and will bring great encouragement to the areas themselves.

Question put and agreed to.

Resolved,
That this House takes note of a proposal for a Regional Employment Premium contained in the Command Paper entitled The Development Areas.

SPECIAL OPERATIONS EXECUTIVE (MR. ALFRED NEWTON)

Motion made, and Question proposed. That this House do now adjourn.—[Mr. Howie.]

Mr. Dennis Walters: Today, the question of war and peace has been very much on my mind—indeed, on all our minds—and it is perhaps opportune that we should be discussing an episode of war which took place some 23 years ago. I am very pleased to have been given the opportunity to raise in the House the case of Mr. Alfred Newton, although I greatly regret that it has been necessary to do so owing to the failure of the Minister to consider and to concede Mr. Newton's claim, in spite of all the arguments which have been put forward and the evidence which has been presented to him. There is, however, still time for the Minister to change his mind, and I hope that he will do so in the course of this short debate.
The facts are as follows—and about these facts there is no disagreement. In June, 1943, Alfred Newton and his brother Henry, two courageous British officers operating with S.O.E. in occupied France, were captured by the Gestapo. Although brutally tortured first at Lyons and then at Fresnes Prison, they remained silent. Their remarkable courage and loyalty is referred to by Michael Foot in his recent book on the S.O.E. It has been freely conceded by the Ministry of Defence and the Foreign Office in their exchanges with me.
Transferred to Buchenwald Concentration Camp, they survived two years of living hell which inflicted severe and permanent damage to their health. In appalling physical condition they were repatriated to Britain in 1945. They were both awarded the M.B.E. Henry Newton, the more severely injured of the two, received a 100 per cent. disability pension and has lived in semi-retirement ever since. Alfred Newton, greatly assisted by the unswerving devotion and courage of his wife, continued working until compartively recently. There is no dispute about the facts so far. As I have said, the Ministry of Defence and the Foreign Office Ministers with whom I have been

in touch over the last year have willingly confirmed the gallantry, the stoicism and the integrity of the two Newton brothers.
We come to the element about which there is disagreement. In January, 1943, Alfred Newton received a communication at his safe house in Lyons that a radio message from London had been received promoting him to captain. He had, in fact, been told before the commencement of this tour that he was due for promotion. He returned to England in 1945 and in due course he raised the matter, but he was told that there did not seem to be any record of this fact. In reply to my question to him last year as to why he had not pressed the matter at the time, he wrote to me as follows:
Frankly, the petty squabble about this promotion hurt me almost as much as the unpleasantness I endured behind enemy lines and the inhuman torture I received because it came from my own kin. Feeling sick and very tired, I resolved to be above such pettiness and that is the reason why I took no further action—happy with the thought that at least I had the esteem and commanded respect among my surviving brother officers. 'S.O.E. in France'—.
He is referring to the book which was published—
has reopened an old wound, but in spite of it all, I want to believe in British justice.
When one considers that Alfred Newton had just returned from two years in a Nazi concentration camp after months of torture in a Gestapo headquarters, it is perhaps hardly surprising that he was feeling sick and tired and unable to pit himself against what must have appeared to him entrenched and limited bureaucracy.
In July, 1946, he received a communication from the War Office on relinquishment of his commission telling him that he would be granted the honorary rank of lieutenant. Clearly in the letter the word "lieutenant" is overtyped over the word "captain". That document is here. At about the same time he received an Army Form X205, which is instructions to discharged or released personnel. In this document "captain" is crossed out and "lieutenant" written next to it. This document is also here. A third document he sent back to the War Office and it is not in his possession, but in this, too, "captain" was erased and "lieutenant" was substituted.
I have here a letter dated 27th July, 1966, from Colonel Buckmaster, who was in command of the French Section of S.O.E. It reads:
My attention has been drawn to passages in HANSARD which concern Mr. Alfred Newton "—
This was in reply to a Question that I asked—
and I am happy to confirm that to the best of my recollection a message was sent in late 1942 or early 1943 through a wireless operator working in occupied France announcing the promotion of both Mr. Alfred and Mr. Henry Newton to the rank of captain. Both these officers were arrested in April, 1943.
I have also a letter from Miss Vera Atkins, who was Colonel Buckmaster's principal assistant at the French Section of S.O.E. It reads:
I should like to confirm what I told you when we met. I believe that it had been decided, probably at a Section meeting, to promote Henry and Alfred Newton to captains and that a message was sent to them in the field congratulating them on these captaincies. When Alfred raised the question a few weeks ago it immediately stirred a chord in my memory. Because of the passage of time, I can only say that my instinctive reaction and quite positive reaction leaves me in no doubt as to the correctness of Alfred Newton's claim. With all good wishes for the success of your efforts in this case.
The reason why Alfred Newton did not press his claim at the time is quite obvious. I referred to it earlier in my speech. I must say that I should have thought that his comment in his letter to me, if nothing else, should shame the Minister into some action tonight.

Dame Irene Ward: Hear, hear.

Mr. Walters: To summarise, the evidence in favour of a promotion of Alfred Newton is as follows: first, Alfred Newton's own word; secondly, three separate documents, two of which are still in existence, in which "captain" is either overtyped or crossed out; and thirdly, there is Colonel Buckmaster's letter, and fourthly Miss Vera Atkin's letter.
I feel that I am asking for justice and belated recognition for a particularly gallant British officer who has sacrificed his health for his country, and who had repeatedly risked his life before that. I sincerely hope that the Minister will give justice and recognition tonight. I cer-

tainly hope that he will not refer to the issue of precedent as he did in his letter to me of 1st March of this year.
He can rest assured that there are not hundreds of other officers who served with S.O.E., who were told that they had been promoted to captain in the field, who were brutally tortured by the Gestapo in Fresnes Prison, who just survived two years of Buchenwald, waiting to pounce in order to claim their promotion. That is just bureaucratic mumbo-jumbo. The Ministry claims that there is no record available. It is widely known that many documents connected with the S.O.E. were destroyed at the end of the war.
Moreover, it is also the case that, from time to time, documents do get lost, both in the Defence Department and in the Foreign Office. Only recently we were reading that the text of the Munich Agreement had disappeared from the relevant Foreign Office file. I do not think that it would be at all exceptional if this particular document had got lost or mislaid.
One of the least attractive British characteristics is the occasional mean way in which we reward people who have served their country with devotion, and the shabby way in which we haggle over recognition. In Italy, or France, or the United States, or indeed the Soviet Union, how different this would be. No existence in the shadows for their Alfred Newtons, but rightly the fullest reward and public recognition.
I am not asking for anything spectacular tonight, only that the promotion from lieutenant to captain, for which there is strong circumstantial evidence, should be confirmed. I am asking the Minister to exercise the benefit of the doubt, to act with a modicum of generosity, to put right an omission and thereby repay a fraction of what Alfred Newton has given to his country in courage and in suffering.

9.44 p.m.

Dame Irene Ward: I want to add a brief word in support of the case put forward by my hon. Friend the Member for Westbury (Mr. Walters). I simply cannot understand why, in view of the circumstantial evidence which has been produced, there should be any argument about the matter at all. Over the years since the war, because I had one


or two connections with S.O.E. during the war, I have made certain representations over a great many cases of one kind or another.
In my own small way, I have made representations about this particular case. I can confirm what my hon. Friend has said, that very often the Foreign Office has said that it is very sorry, that it cannot go into certain actions that have taken place because the documents had been mislaid or lost. Part of the problem about Mr. Michael Foot's book was that many documents were incomplete and he was unable really fully to develop some of the writings which he embodied in his official history of the S.O.E. I must say that on the one or two occasions, when I have not had the circumstantial evidence produced by my right hon. Friend and have made representations to the Foreign Office, as I understood it at the time the benefit of the doubt was always accepted by the Foreign Office. Indeed, we all in this House know that in general it has always been the policy of Her Majesty's Government at tribunals and the like to give the benefit of the doubt whenever possible. I cannot see that in this case there is any reason why the benefit of the doubt cannot be given.
I do not want to take up the time of the House, because I want to hear what the Minister has to say. I must, however, say with all the emphasis which I can command that I would be horrified and scandalised if the case which has been put forward by my hon. Friend, and the support that he has had from Colonel Buckmaster and Miss Atkins, who know a great deal more about the kind of circumstances than any official in the Foreign Office who did not serve in S.O.E., is not accepted.
If the case put forward by my hon. Friend is not accepted, certainly my faith in justice and humanity to those who served this country so gallantly and so well in our hour of need will be shattered once and for all. I am not adding any more than that, except that I have never heard how a case of this kind, which has so much circumstantial evidence to support it, could be denied by the Foreign Office or the Ministry of Defence. Therefore, I can only hope that we shall tonight get a satisfactory answer to the case which my hon. Friend has put for-

ward for so long and for which he has fought so hard.

9.47 p.m.

The Under-Secretary of State for Foreign Affairs (Mr. William Rodgers): I am sure that the hon. Member for Westbury (Mr. Walters) was quite right this evening to raise the case of Mr. Alfred Newton, because he has shown a close personal interest in it over a period and he has been most persistent in seeking to unravel its complexities. I am glad that the hon. Lady the Member for Tynemouth (Dame Irene Ward) also has been present because, as she has said, she has made representations about the case.
I hope that the hon. Gentleman will accept it when I say that he put his case with great feeling and very movingly. He will, I am sure, grant the same good will and as much generosity on the part of those who have dealt with the case from this side, even if our views may in any respect be different. I certainly agree with the hon. Member that bureaucracy is the enemy. It would be absolutely wrong for any Minister at any time to use bureaucratic reasons for failing to take an action which, for other reasons, should be taken.
The whole story involves the intricate and inevitably, in some ways, still controversial story of the Special Operations Executive in France and the tragic consequences, as the hon. Member has said, of the gallantry of some of its own members. It is only necessary to turn, as the hon. Member has done, to the pages of Mr. M. R. D. Foot's thorough and sober account of S.O.E. to get a vivid sense of the nature of those operations and to recognise the achievements of S.O.E. and of the devotion, and often the cruel suffering, of those who worked in it.
I should like to make it clear that we are not discussing this evening—we would not be competent to do so—the merits of Mr. Alfred Newton in any claim which he may have had to be promoted to captain. The plain fact is that there is no question of his ability or of the most courageous way in which he carried out his duties. Twenty-five years after the event, I have the profoundest respect not only for all that he did, but for all that he clearly was in those terrible times. I would like to add my tribute to that of


the hon. Gentleman to his gallantry stoicism and integrity.
But, if we were considering merit, it is worth recording that officers in S.O.E. had lower ranks than at a distance would seem appropriate. As Mr. Foot himself says in his book:
S.O.E. as a body set little store by rank.
Most of the senior officers were of relatively low rank, the second in command of the whole organisation being only a squadron leader. The majority of S.O.E. agents dropped into France were lieutenants, which was the normal rank for a saboteur like Alfred Newton.
As we all know, Mr. Alfred Newton and his brother suffered appalling treatment following their capture and he consequently receives a 100 per cent. disability pension and has received the maximum in compensation paid to any individual out of the fund for victims of Nazi persecution.
Although to some of us any recognition, whether of this kind or of any other, must seem very slight when set against the hazardous operations in which he was engaged and the fate he suffered, it is also good to reflect that, after the war, Mr. Newton was awarded the M.B.E. in recognition of his outstanding services.
We must therefore start, as did the hon. Gentleman and the hon. Lady, from a prejudice in favour of doing what we can for Mr. Newton and of trying to put his heart at rest. At the end of the day, we cannot be generous enough to those who served with such distinction. It would certainly be my wish and, I am sure, that of my right hon. Friend the Foreign Secretary that we should lean over backwards to try to meet the hon. Gentleman's plea. We should like to find justification for doing something which obviously matters to Mr. Newton and should also matter to the House.
On the other hand, it would be wrong and, of course, unfair to many others to take any steps if we were not satisfied that the case for doing so had been fully made out. I cannot believe that Mr. Alfred Newton himself would want us to act except out of conviction that we were following the right course. The plain fact is that, despite the coincidence mentioned by the hon. Gentleman and

the recollections of Mr. Newton and others, there is simply no record whatever of his promotion to captain having ever taken place. I hope that the hon. Gentleman will believe me when I say that our examination has been exhaustive—

Mr. Walters: By "others", I presume that the hon. Gentleman means Colonel Buckmaster and Miss Atkins?

Mr. Rodgers: If the hon. Gentleman will wait, I will answer some of his questions. I have rather less than the 15 minutes which I had been led to expect.
The hon. Gentleman said something which was probably a slip of the tongue—that we had refused to consider or to concede, but he will probably admit that we have considered very fully. Whether we have conceded or will concede is another matter, but he cannot honestly say that we have failed to give a great deal of attention to the matter. Of course, he is right—it is well known—to say that administrative arrangements in S.O.E. at this time left something to be desired. After the war—the hon. Lady has drawn this to Ministers' attention many times—the organisation was disbanded in haste. No doubt there were mistakes, both at headquarters and in the field, which may have involved instructions not being carried out, but the personal files of those immediately concerned in this question are still in existence.
A careful search through those documents and relevant War Office files has shown no trace of any recommendation for Lieutenant Newton's promotion. It has to be remembered—this point was made to the hon. Gentleman by my hon. Friend the Minister of Defence for Administration—that military officers serving in S.O.E. could not be promoted without the agreement of what was then the War Office. It would have been rather unusual in the circumstances of S.O.E. for a lieutenant who had been given the substantive rank of lieutenant only in October 1942—it is possible that some people's confusion may have arisen from this—to be promoted captain in the following February. I am certainly ready to admit that this itself could not be ruled out. That is why we would not dismiss, without a thorough investigation, the experience on which Mr. Newton bases his belief in his promotion.
As the hon. Gentleman has said, Mr. Newton states that early in 1943 he was told in the field by a brother officer that he had seen a signal congratulating Lieutenant Newton on his promotion. We cannot know the reason why Lieutenant Newton was spoken to in these terms. However, no confirmation of this oral message was ever received and no copy of the signal has been found.
It is easy to speculate on what, in fact, happened. The most feasible explanation—and this may account for the memories of several people about it—is that a discussion took place about the possibility of promoting Lieutenant Newton. If the outcome was a decision to do so, this decision was apparently never implemented, for one reason or another. But I think it true to say that this kind of discussion was not unusual. There may have been others who hoped and believed that they would be promoted and were disappointed that this did not happen. There are probably those who nurture to this day a grievance at not receiving the promotion which they believed they were entitled to—on good grounds. After this passage of time the details are likely to remain obscure. All I can say is that nothing was ever put through to the effect that Lieutenant Newton had been promoted.
The hon. Gentleman referred to Colonel Buckmaster and Miss Atkins. There are the memories of the head of Mr. Newton's section of S.O.E. and of another staff officer in the same section. Both of them say, in good faith, that to the best of their recollection a message was sent at the time congratulating Lieutenant Newton on his promotion. But they are not able to say categorically that he was promoted. They are unable to be positive about it.
Then there is the question of why Mr. Alfred Newton received two documents—the hon. Gentleman mentioned three—from the War Office after the end of the

war, one of which at least was addressed to him as Lieutenant Newton but on which the word "Lieutenant" had been substituted for the word "Captain", which had been erased. The fact is that a mistake had been made on a single internal document in the Military Secretary's department of the War Office. This was later corrected by the Personnel Branch and the rank was changed before the documents were sent out. In the light of the rest of the history of this case and of the hon. Gentleman's present interest in it, this may sound a curious story. I am sure he will admit, on reflection, that, on its own, it is an entirely convincing one and not at all surprising in the circumstances of the time.
There are other facts that should be taken into account. If there were time I would dwell on the point made by the hon. Gentleman about the circumstances at the time when Mr. Newton returned to England. We have, for example, consulted the Administrative Officer who, one might have expected, would know about this promotion. Although he remembers that a discussion took place, he does not remember that a record was ever made to the effect that Mr. Alfred Newton was promoted. We must also reflect, despite what people may think 20 years after, that immediately after the war, whatever the circumstances, those who had been close to Mr. Newton and knew his personal circumstances did not take the view then that he had received promotion.
The hon. Gentleman has made the best possible case which could be made for Mr. Newton. However, I have reluctantly reached the conclusion that the evidence at present existing does not justify the very exceptional measure of a retrospective promotion to Captain for Mr. Alfred Newion.

Question put and agreed to.

Adjourned accordingly at one minu to Ten o'clock.